Bullard Calls to “Front-Load” Rate Hikes

Contrary to his name, St. Louis Fed President James Bullard said during a panel discussion at Columbia University that inflation could spiral out of control if action isn’t taken swiftly and prudently to curb inflation (i.e. raise rates to mf ininfity and beyond). Not really, but Bullard did mention “front-loading” rate hikes to assuage the fastest growing inflation in 40 years.

Even with the Russia/Ukraine situation seemingly fizzling out, Bullard’s hawkish (not the Powell fake hawkishness) panel talk sent the S&P down over 2%, and the NASDAQ down nearly 3%.

Bullard went on the record he wanted to just throw out all conventional Fed wisdom (which is an incredibly subjective statement) and “front-load” rate hikes and get right to the point with a 100bps rate hike. One can only surmise the effect that would have the largely “overvalued” markets right now.

Yup, that’s accurate.

The Fed minutes released Wednesday didn’t give any inclination to any more aggressive Fed rate hikes/tapering than had been outlined earlier in January by Powell and his cohort. With inflation and PPI running absolutely nuclear over the past year, the Fed may come out of the woodworks and make Bullard’s full percentage point rate hike a very real (albeit scary) reality for us. Say your prayers.