Fed's Bullard Admits "Missing Dot"; Swings From Uber-Hawk To Ultra-Dove

Tyler Durden's picture

When the all-important 'Dot-Plot' was unleashed this week by The Fed, we noticed two things: first, a new ultra-dovish member had appeared, and second, one member was 'missing' from the longer-term estimate. We now know who that new "Kocherlakota' is - none other than previously uber-hawkish Jim Bullard. From his March "raise rates or face devastating bubbles" speech, Bullard now believes that one rate hike is enough for at least the next two-and-a-half years... and these are the people that the mainstream media dote on as all-seeing oracles?

On Wednesday, when Janet's jabbering crushed Fed credibility further into the dirt, we noted:

Since everyone is focused on the dot plot, here it is, and while Kocherlakota is gone, he has been replaced with a new Kocherla-Dota as someone is dragging on the new low 2017 and 2018 dots (and is entirely missing from the longer-term dots): it appears a new Fed uberdove has emerged...


Now we have an answer, as Bloomberg reports, St. Louis Federal Reserve President James Bullard is the missing dot.

When the Fed released its economic projections in Washington on Wednesday, one of the 17 officials sitting around the table didn’t put forth an estimate for a long-run interest rate projection, displayed in the Fed’s so called “dot plot.” In a statement on Friday, Bullard made it clear that it was his -- the St. Louis Fed is switching to a new forecasting style that doesn’t incorporate a long-run estimate.


“The forecast simply stops at 2.5 years,” Bullard said in the statement. Given his current outlook, Bullard expects trimmed-mean inflation of 2 percent, unemployment of 4.7 percent, and output growth at 2 percent over the 2.5 year horizon. He sees 63 basis points as the appropriate rate policy path over the forecast horizon, indicating that the lone official projecting one increase this year and none for 2017 and 2018 was also him.




Bullard, in his statement, said that the usefulness of the model involving long-run forecast may have come to an end “in the last year.” He noted that real output growth, unemployment and inflation may be at values that could be sustained over the forecasted horizon, provided there are no shocks, but said the economy does not converge toward a single steady state in the long run -- multiple regimes can evolve, depending on factors like productivity growth.


As a result, he says the fed funds rates should remain at 63 basis points during the remainder of his forecast. The current target rate is 25 to 50 basis points.


"An older narrative that the bank has been using since the financial crisis ended has now likely outlived its usefulness, and so it is being replaced by a new narrative. The hallmark of the new narrative is to think of medium- and longer-term macroeconomic outcomes in terms of regimes," Bullard said.

Which is all fine and dandy - and not entirely unexpected from The Fed... except that in March, this is what the now uber-dovish Bullard exclaimed...

Recalling the tech bubble in the 1990s and the housing bubble of the 2000s, he said: “Zero [interest rates] is too low in that kind of environment. I wouldn’t be comfortable with that. A zero rate would feed into an asset price bubble”.


“When asset bubbles start, they keep going until they blow up out of control with devastating consequences.”


The policy maker dismissed the softer US economic data that has emerged so far this year as temporary and said that the current low inflation was caused by cheap energy prices and would move up once the oil market stabilised.

Quite a different picture from today's...


And these are the people running the world?

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semperfi's picture

does anyone take this shit seriously? jesus f*g christ!

Fisherman Blue's picture

The FED will be "seriously" monkey hammering gold you can bet on that.

Squid-puppets a-go-go's picture

Bullard clearly took it seriously when the men in black suits showed him that video of how they REALLY executed JFK

NoDebt's picture

Bullard's not stupid.  He wants to be the only Fed Head with an accurate forecast of future interest rates.  Zero as far as the eye can see.  He'll be correct, too.

Econogeek's picture

Some Fedhead will forecast negative rates. Give them time. I think that will be more accurate. Don't see how it can't happen. We're in a debt deflation and these guys all want to keep their jobs.

Hitlery_4_Dictator's picture

We. Are. Screwed. As. A. Society. 

FreeShitter's picture

Yes we are....those motley crue and ratt concerts back in the day were the peak of humanity ;)

semperfi's picture

no, we just have to get to work, the 10% of us who's brain stem is still attached, and fix this clusterfuck - while the other 90% with their fingers up their asses watch from their couch

Hitlery_4_Dictator's picture

The Decade of Decadence. Primal Scream, shout, let that muther out.

Hal n back's picture

did bullard actually say that he dismissed hte slow econ activity because as oil price increase econ activity will pick up?There is a disconnect there  unless its demand driving oil price up and not just higher oil prices.


Seasmoke's picture

After reading just this one post, why would anyone on the planet listen to these fucking liars ????

nibiru's picture

is total tabloidization of financial markets. First, we saw it in politics, now we can clearly see it in FED's policy. Janet is here to just create this headline porn and markets are excited enough to carry on with 'new gospel' every time she opens her mouth.

It's ridiculous. She, by far can be the knight in white armor and rather would cut the rates down to NIRP just like Draghi and Kuroda - to bail out cronies than she is really interested in following logic. Anyways her increasing rates would push the economy into recession - it's just matter of time not 'if'.



thinkmoretalkless's picture

Because the alternative is to think for themselves...and that's not encouraged anymore.

Phat Stax's picture

Remember, Yellen just said that they make decisions meeting by meeting.  Stockman just said there is no strategy whatsoever.  We're seeing both play out right here.

maskone909's picture

NARRATIVE!?! How ironic! Great choice of words fuckface. Its all just a narrative guys!! Like the idea that we get to choose our own political candidates! Narrative, like the script in a fucking play!

NoDebt's picture

Kinda pisses you off, doesn't it?  Yeah, pissed me off, too, when I first figured it out.  You'll get past that.  I did.

Baronneke's picture

They are not running the world, they ruin the world.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Jun 17, 2016 9:13 AM

"When the stock markets change, I change my mind. What do you do, sir?" - John Maynard Keynes

wmbz's picture

So Bullard goes full retard! These assholes really think that they are masters of the fucking universe.

2018 my ass! This "system" will be so fucked by then it will not matter.

Past time to start the hangings!

mtndds's picture


Two Theives and a Liar's picture

All that's missing is the clown makeup and the clown car they all pile out of. Thanks a lot Woodrow Wilson...the joke's on us!

Herdee's picture

Bullard - Mr.East St. Louis.The guy's a walking disgrace and moron to the poor.Him and Obama,they've done nothing to help black people.

TrustbutVerify's picture

Raise by 5 basis points every 6 months (total of 25 basis in 2.5 years) or one basis point every month for 2 - 2 1/2 years. Or raise by 5 basis points and evaluate the results over a period of time.  

Put simply, greatly reduce the amount of the raise by an amount perceived as near negligible. 

Baby Eating Dingo22's picture

So he changed his mind and decided he likes bubbles

youngman's picture

They have lost all Cred.....they really are just playing the game now of Cameras...who can get more air time

youngman's picture

By 2018..the news will be filled with how all pensions are broke

Farmer Joe in Brooklyn's picture

...and bankrupted insurance companies

abyssinian's picture

This clown is the biggest retard scam!  Bull shiter! lol 

khakuda's picture

He has that smug face you would kind of like to see on the unemployment line.

jamesmmu's picture

Second Biggest U.S. Mall Owner Misses $144 Million Dollar Loan Payment



khakuda's picture

It's game over.  The economy won't be normal if you can't normalize.  Single digit positive rates are needed to give savers, pensions and insurance companies money to spend.  Leaving rates at zero in an effort to bolster tapped out borrowers can only fail.

moneybots's picture

"From his March "raise rates or face devastating bubbles" speech, Bullard now believes that one rate hike is enough for at least the next two-and-a-half years..."


Clown show.

ironicmerman's picture
ironicmerman (not verified) Jun 17, 2016 10:28 AM

It seems like you have to be succeptible and prone to wild swings in opinion whenever involved in a government position requiring big decisions on policy.  The Fed, Clinton, Trumpler, etc.  Even Libertarian Gary Johnson has dialed back some rhetoric, though he might have been really high when the original comments were made.

financialrealist's picture

every dot path since 2012 had longer term rates (3 years plus) at 3% or higher, now for the first time since 1/25/2012, they have fallen below 3%...(that in itself speaks volumes); at this points rates are baked into the equation, normalization is impossible...and they know it...just waiting for the green light to let it all go...


SubjectivObject's picture


The consistent action of the Fed is to create welth transferring bubbles.

Any talk that accepts the Fed as a credible civil institution is outright delusion.

End the Fed is the only credible position.

overmedicatedundersexed's picture

as long as the insiders can front run on statements from the FED, they don't need to do anything they imply..sweeet to be jewish and on the inside..right Yellen?

gcjohns1971's picture

Only one world-currency exists despite Central Banks rather than because of them.


To the extent you disbelieve the sincerity and competence of Central Bankers, you must believe in the value of their SOLE ALTERNATIVE.