Fed’s Bullard Says Front-Loading Could Lead to Rate Cuts by 2023

“I have also said we should get to 3.5% by the end of the year, which is higher than some of my colleagues,” Bullard said in a Fox Business interview Friday. “The more we can front-load and the more we can get inflation and inflation expectations under control, the better off we will be. In out years -- ‘23 and ‘24 -- we could be lowering the policy rate because we got inflation under control.”

Bullard said the decline in the US stock market wasn’t surprising and was in part a response to higher interest rates. The market sank further Friday and briefly entered a bear market, defined generally as a 20% drop. The Nasdaq index, dominated by technology stocks, is off 29% this year.

“There has been a lot of repricing in markets,” Bullard said. “Part of that is due to the Fed, but part of it might also be what were the prices before the downturn occurred. You would expect with the Fed raising rates that all these assets, trillions of dollars worldwide, would have to be repriced.”