USA: The credibility of the Fed is at stake in the face of inflation-Bullard

WASHINGTON, Feb 14 (Reuters) – Four consecutive months of high inflation in the United States warrants action and further U.S. central bank action should “ratify” market expectations, the Federal Reserve Chairman said on Monday. of St. Louis.

Speaking on CNBC, James Bullard said the Fed’s ‘credibility was at stake’ in its aim to bring inflation down and reiterated his call for an acceleration in the pace of rate hikes .

Last week, he had already argued for a US Federal Reserve rate hike of 50 basis points at its scheduled meeting in March.

The rise in consumer prices in the United States accelerated in January to 7.5% over one year to reach an all-time high in 40 years.

“It was really (the numbers) for October, November, December and January that challenged the idea that this inflation was going to naturally moderate in a reasonable timeframe without Fed intervention,” he said.

James Bullard estimates that the Federal Reserve will have to raise rates by 1% in the next three FOMC meetings, which implies a hike of half a percentage point at one of the Fed meetings instead of the traditional hike of 25 basis points favored by the institution in recent years. (Report Howard Schneider; French version Claude Chendjou, edited by Matthieu Protard)