|
St.
Louis Federal Reserve President Bullard said the debate is now
shifting toward the Fed's rate path in 2017 and how Trump's
policies on taxes, infrastructure, spending and regulation will
affect growth, productivity and ultimately Fed policy.
"Markets are currently putting a high probability on a December
move by the FOMC. I’m leaning toward supporting that," Bullard,
a voting member of the U.S. central bank's rate-setting
committee, told a conference in Frankfurt. "I think the question
now is more about 2017."
Markets now put a 90 percent chance on the Fed hiking rates by
25 basis points on Dec 14.
Bullard said some of the new administration's measures could
have a significant impact on the economy in 2018 but some
possible proposals to curb immigration and trade may take a
decade to have a major impact.
"I see those as slow moving issues," Bullard told a panel
discussion. "Trade is something that enters into negotiations,
it takes many years. It can have a big impact on the economy,
but it would be many years out ... ten years.
"Same with immigration. Even a successful immigration reform ...
would change the composition of the labor force over time,"
Bullard said. "That would be something that would have possibly
a big impact but over five to ten years."
Regulatory changes could have an impact in 2018-2019 and the
same was true for tax reform, which could potentially spur
investment and increase productivity, Bullard said, adding that
he reserved judgment on any such policies until specifics become
clear.
(Reporting by Balazs Koranyi, editing by Larry King and Janet
Lawrence)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
|
