St. Louis Fed President James Bullard said Friday he wasn’t fazed by the relatively small gain in jobs in November and wants the central bank to taper its asset purchases at a faster pace than had been planned only a month ago.
“Except for the headline number, that [jobs] report seemed quite strong across the board,” Bullard told reporters after a speech to the Missouri Bankers Association.
“It certainly seems consistent….that this is a very tight labor market,” Bullard added.
The St. Louis Fed president, who is a voting member of the Fed’s interest-rate committee next year, said his “base case” is for two interest-rate hikes in 2022.
He declined to say what month the Fed would first “lift-off” from the current level of zero.
Bullard, the first on the Fed to support ending asset purchases in March, said he still supports the move.
At the last meeting in November, Bullard lost that argument, and the Fed decided to go relatively slowly and taper by $15 billion per month — a pace that would end the taper program in June.
But economic data since the Fed meeting in early November has raised concern that higher inflation won’t go away anytime soon.
On Tuesday, Fed Chairman Jerome Powell opened the door for a faster taper and many of Bullard’s colleagues now say they support ending the program in March, which translates into tapering at a $30 billion-per-month-pace.
Bullard dismissed fears of some economists that the U.S. economy will slump in 2022 as massive government assistance to households comes to an end.
While growth is surely going to slow next year from this year’s strong pace, the economy will still expand at “what would normally be considered a super rapid pace,” he said.
The St. Louis Fed president said it was too soon to predict how the omicron variant would impact the U.S. economy.
He added that the economy has already adapted to the pandemic and earlier variants and the U.S. “will be able to handle this one as well.”
moved lower on Friday as markets have been volatile since the omicrom variant was discovered and the shift in Fed policy became apparent.