Former Fed 'Hawk': More Concerned About the Economy Than Inflation, Fed to Maintain Wait-and-See Approach Until at Least the Second Half of the Year

On May 14th, the former President of the St. Louis Fed, Bullard, stated in an interview that "the Trump administration was capable of reaching a trade deal before inflicting irreversible damage on the US economy. During the 2018 - 2019 trade war, we witnessed the slowdown of the US economy. The slowdown in economic growth is typically somewhat related to a decrease in the inflation rate. Therefore, we will not see as high an inflation rate as originally anticipated. I have always been opposed to the inflation narrative related to tariffs." "Currently, we cannot assert that we are in an economic recession. The main concern is how the situation will evolve in the second quarter, the third quarter, and towards the end of the year. Regarding interest rate cuts, it appears that the Fed will at least wait and see until the latter half of this year. This will largely depend on the specific developments in the trade war." (FXStreet)