Bullard is the worst for reacting to equity markets
He's speaking for the next hour on XM Radio (Channel 111, if you want to hear him blab):
- Says he's more sanguine than the markets on the global outlook
- Our tracking still has Q3 growth at 2.5-3.0%
- Falling labor force participation 'doesn't mean all that much'
- The unemployment decline is not over, it will continue in the next two years
- 'Even if we do liftoff, we've committed to very low rates'
- Unemployment will fall to 4-4.5% is his baseline scenario
- My long-run Fed funds rate is 3.25% 'I think that's ultimately where we're headed'
- Discord between FOMC and market expectations should close once Fed hikes once or twice
- To justify market expectations, growth would need to be very slow and employment wouldn't improve much at all
- We haven't raised rates in 10 years so you have a lot of traders who have never seen a hike (that's why markets are wrong)
- I'm not trying to react directly to equity markets
- Yuan devaluation puts focus on Chinese growth
- Business contacts more downbeat on China than before
- IOER will mean big payments to banks
- Payments to big banks could cause political problems for Fed
- No decision has been made on rates, but there has been a lot of cumulative progress
He still has about 40 minutes to go but he doesn't sound at all like he's going to offer a dovish comment to equity bulls.
