You can call James Bullard a naïve optimist. Go ahead, do it. You’d almost certainly be right, but he doesn’t care. He knows that everything’s going to work out perfectly, and that means that the people who actually get a say on these things—and who are saying he’s crazy—will come around and say, “Hey, that James Bullard really is a great guy. And all of the improbably wonderful things he said would happen did happen. Let’s give him the recognition he deserves with an interest-rate hike for Christmas.”
“If you get 3% growth for the rest of this year, if you get unemployment coming down below 6%, if you continue to have jobs growth at 200,000, if you continue to see inflation moving back up toward target, I think if we get to the fall of the year and all of those things are transpiring as I’m suggesting they will, that will change the conversation about monetary policy, and there will be more sentiment toward an earlier rate hike,” Mr. Bullard told reporters after a speech.
The official noted that his present projection is the Fed will first increase what are near-zero percent interest rates sometime near the end of the first quarter of next year. But, he said that view is now somewhat in flux.
Fed’s Bullard Says Central Bank May Raise Rates Sooner Than Many Now Think [WSJ Real Time Economics blog]