Fed’s Bullard support taper in November

In a CNBC interview, Federal Reserve’s James Bullard has stated that he supports starting a taper in November.

Key comments

Says he wants to finish the taper in Q1 of 2022 to be in place to react to higher inflation.

Says the pandemic will come under better and better control with pills, booster shots, shots for kids.

Says still in great shape economy-wise despite the delta setback in Q3.

Says by next spring could see the unemployment rate back to pre-pandemic level.

Says ‘reasonable’ to think inflation could come down on its own, but there’s some risk it could go higher.

Says want to be in a position to raise rates if needed in spring or summer of 2022.

Says the probability of recession is exceptionally low at this point.

Meanwhile, the carry trade currencies, where rate hikes are being priced in, are higher. The US dollar is taking up the top spot behind CAD and AUD on Tuesday. 

DXY, the index that measures the US dollar vs a basket of major rivals, is trading through 93.50 and is at the highest level since Sep 2020. 

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