The Sun Is Shining And James Bullard Just Feels Like Everything's Going To Be Great

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He's sitting out the next couple of years of FOMC meetings, where at some point Janet Yellen & co. will decide to raise interest rates for the first time in eight years and counting. But St. Louis Fed President James Bullard has a feeling—admittedly not one widely shared—that things are just going so great that the inevitable is just seven to 10 months away.

“I’m more optimistic than most on [the Fed] as to the speed with which unemployment will drop. I also have inflation returning to normal faster than some of the others,” Mr. Bullard told reporters after a speech in Little Rock, Ark. When his upbeat views on the economy are weighed together, it means the Fed can begin to lift interest rates from near zero late in the first quarter of 2015, he said….

In his formal speech, Mr. Bullard indicated he was unfazed by the recent spate of weak economic data, including signs that the U.S. gross domestic product, or total output of goods and services, probably declined in the first three months of the year. And he expressed confidence the economy will pick up steam.

“While first-quarter GDP growth was weak, growth in coming quarters is still predicted to be robust,” according to slides Mr. Bullard prepared for his speech. He added, “the average quarterly pace of growth in 2014 may still be an improvement relative to 2013.”

Fed's Bullard Says First Rate Increase Could Come Late in 1Q 2015 [WSJ Real Time Economics blog]

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