Bullard Expects Fed to Cut Rates at Next Two Meetings

Monetary Policy & Economic Outlook - The market anticipates a reacceleration of the US economy, a view the speaker shares [2] - The economy is expected to remain strong through the rest of the year and into 2026, supported by new administration policies [3] - Further rate cuts are expected during the next two FOMC meetings, aligning with market expectations [4] - The Fed aims to gradually bring inflation down to 2% over the next two years, avoiding a rapid or overshoot scenario [6] - The committee is largely "looking through" inflation, anticipating that tariff-related inflationary effects will be smaller and later than previously expected [8] - The Fed is confident in moving closer to a neutral policy, maintaining downward pressure on inflation but less intensely than current measures [9] Inflation & Targets - Core PCE, a key inflation metric, is at 29%, nearly a full percentage point above the 2% target [5] - The Fed is committed to achieving its 2% inflation target, favoring a single target for simpler communication and to avoid ambiguity [10][11] Data & Modeling - A government shutdown and the potential lack of economic data, such as the nonfarm payrolls report, would be a concern but manageable [12][13] - The current moment is messy due to questions about data integrity and key economic changes, suggesting a need for a new paradigm to understand optimal employment [14] - The Fed should review its models and consider a parallel process with a new model to improve operations over the next decade [15][16] FOMC & Governance - Concerns exist that removing Governor Lisa Cook could cause chaos and disruption in financial markets [17] - The courts are expected to ensure due process for any charges against FOMC members to prevent politically motivated dismissals [17]