Fed's Bullard Slams Recovery Narrative, Confirms Fed Top-Ticked Economy; Hints At Fed Policy Error

Tyler Durden's picture

Back in 2014, just as the market was plunging, St Louis Fed's Bullard stopped the bleeding when in a Bloomberg interview said that a "logical response" to the tumbling market, would be to "delay the end of QE" and strongly suggested ed that "QE4" would be considered to prevent further market losses. The S&P exploded.

Well, this morning the Fed's nonvoting converted permadove (Bullard used to be the most hawkish Fed member until his unexpected conversion in 2014), is back and in prepared remarks for a speech in St. Louis is once again suggesting that all the talk of an "overheating" economy was just that saying that “financial market readings since the March decision have moved in the opposite direction” of what would normally occur after a rate hike, adding: "this may suggest that the FOMC’s contemplated policy rate path is overly aggressive relative to actual incoming data on U.S. macroeconomic performance.”

Speaking in St. Louis, Bullard admitted that U.S. macroeconomic data have been relatively weak, on balance, since the Federal Open Market Committee (FOMC) met in March and raised the fed funds rate. He said that economic growth is unlikely “to move meaningfully” this year from the current trend of about 2 percent.

He also said that inflation and inflation expectations “have surprised to the downside” and noted that financial market readings since the March decision have been opposite of expectations.

Additionally, “even if the U.S. unemployment rate declines substantially further, the effects on inflation are likely to be small” and notes that “labor market improvement has been slowing, perhaps close to a trend pace, given the current labor productivity growth regime.”

Bullard also commented on the slowing GDP growth rate, saying that “tracking estimates for second- quarter real GDP growth suggest some improvement from the first quarter, but not enough to move the U.S. economy away from a regime characterized by 2 percent trend growth.”

“This may suggest that the FOMC’s contemplated policy rate path is overly aggressive relative to actual incoming data,” Bullard said. He also discussed the relationship between unemployment and inflation and said that, even if U.S. unemployment declines substantially further, the effects on inflation are likely to be small.

Translated: Bullard confirms that the Fed once again top-ticked the economy, something only the S&P appears to have missed.

As for the Fed's expectations of 2 rate hikes for 2017... let's just say the economy disagrees.

The result: both USDJPY and S&P futures are not happy with today's admission by at least one non-voting Fed president that the Fed may have one again made a "policy error."

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Ignorance is bliss's picture

I must be shopping at the wrong grocery store. Cause my grocery bills are heavily inflated and increasing. I feel like we see 6% inflation per year and I haven't seen a pay raise in 6 years. Help me understand why I need to take a 2% paycut every year through inflation. This slave is getting fucking tired of these dickheads.

FreeShitter's picture

The slave will remain beaten and whipped until morale and the continued transfer of wealth improves.

espirit's picture


Sooo… the Unicorn shitting skittles narrative isn’t working any longer?




DeadFred's picture

Interest rates will be cut to 0.5% in June. They know what's coming.

Juggernaut x2's picture

B-B-But the Fed is going to blow it all up to screw Trump/ sarc

HalinCA's picture

Trump is already screwed ... he's no threat anymore ...

Iconoclast421's picture

Because yachts are nice. They need more yachts. Every yacht they buy requires you to take another 0.0002% pay cut. They buy a LOT of yachts....

LawsofPhysics's picture

The Fed continues to enable the greatest FRAUD/THEFT in the history of the planet!

"Full Faith and Credit"

tick tock motherfuckers!!!

GodHelpAmerica's picture

The propagandists at the Atlanta fed say we've achieved economic utopia with a 4.1% forecast for Q2. Real world data be damned. JY needs her cohorts to buy unwanted assets and disseminate the "all is well" message so she can continue hiking into weakness.


CJgipper's picture

I'm calling Dow +200 today, right now.

Justin Case's picture

The economy is a low flying plane that is losing speed.

Extend and pretend has been in play since 2007. There is no exit plan. Once they crossed the Rubicon of printing money, they will have to print or die.

espirit's picture


Watch out for that cloud of Black Swans.


CJgipper's picture

I'm in the blind locked and loaded with 3.5" BB and a super full choke.  Tis the season.

spastic_colon's picture

of course this is the new narrative; they were geniuses with the magic negro in office; now they have to talk back more rate hikes as they are finally admitting reality of the "never happened" recovery.

papaswamp's picture

Bulltard panics twitter...causes it to break...

DavidC's picture

Crikey, the US open is all over the place today, jumps of 20 points up and down on the Dow.


DavidC's picture

How can these fuckwits be so educated and yet so stupid?


A. Boaty's picture

High intelligence and education do not necessarily correlate with constructive values and morality.

BorisTheBlade's picture

High intelligence and education do not necessarily correlate [full stop]

onthedeschutes's picture

"How can these fuckwits be so educated and yet so stupid?"

That's exactly the same question the Fed bankers ask of the American populace

khakuda's picture

What they don't seem to get is that Fed policies affect asset prices much more than the real economy.  They stop raising rates and the stock market soars.  Doesn't do much for the real world recovery which is long in the tooth.

mily's picture

What a -1.1% down does to a man

JailBanksters's picture

How can you have a Recovery when the Club Fed has not even admitted to a Recession.

The best you will get out of them is, the ecomony is not progressing as fast as we were hoping,

they will never ever say the "R" word or even worse the "D" word.

I think those words are Verboten at the Fed.


Five Star's picture

Oh and the US is seeing the longest decline in industrial production outside a recession since 1919...


We Are The Priests's picture

For fuck sake, let it all crash, already.

Chippewa Partners's picture

If ZHers haven't read FED UP it's time. Great read from an insider. It gives you a glance into just how these clueless banksters are screwing America than you could ever imagine! If you are headed to the beach instead of Marfa it's a great read.

Yen Cross's picture

  These assclown central banksters have themselves caught between the locomotive and the mountain side, with the ACME bomb right above them.

moneybots's picture

St Louis Fed's Bullard stopped the bleeding when in a Bloomberg interview said that a "logical response" to the tumbling market, would be to "delay the end of QE"


When QE ended anyway and Japan picked up QE, Bullard said his August market goosing remarks were misunderstood.


Bulllard is a market manipulator.

decentralisedscrutinizer's picture


It’s becoming obvious that our worst economic and political problems revolve around the global hegemony of corporate cartels headquartered in the US, where their military force resides. The only effective way, now, to regain our sovereignty as citizens of a constitutional republic is to severely curtail the activities of such corporations. To remain a free nation, we have to stop granting corporate charters to every con artist that comes along and start demanding a well-defined social value in return. The "Divine Right Of Kings” should not apply to fictitious entities just because they are “Too Big To Fail”. We can't take the incorporation of private transnational banks for granted anymore. The government must be held responsible to human voters, not fictitious entities.




An omission in the US Constitution created the swamp of corporate corruption we now see surrounding our capital. It is a swamp that can't be drained at this point because the Constitution doesn’t provide a legal drain. This 28th amendment is intended to provide that drain so Congress can legally pull its plug. As a matter of political practicality we must rely on the Article 5 Constitutional Convention for which the electorate will need prior consensus to avoid preemptive state or corporate interference. This is what it will take, in plain language, to save the world; and nobody gets hurt:




28th Amendment


Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to:


1, prohibitions against any corporation;


a, owning another corporation,


b, becoming economically indispensable or monopolistic, or


c, otherwise distorting the general economy;


2, prohibitions against any form of interference in the affairs of;


a, government,


b, education, or


c, news media, and


3, provisions for;


a, the auditing of standardized, current, and transparent account books, and


b, the establishment of a state and municipal-owned banking system


c, civil and criminal penalties to be suffered by corporate executives for violation of the terms of a corporate charter.




The Founders had to fight a bloody Revolutionary War to win our right to incorporate as a nation – the USA. But then, for whatever reason, our Founders granted the greediest businessmen among them unrestricted corporate charters with enough potential capital & power to compete with the individual States, smaller sovereign nations, and eventually to buy out the Federal government itself. Now that these fictitious entities own the USA and command its military infrastructure by virtue of the Federal Reserve Corporation and run it by virtue of regulatory capture, MSM propaganda, and Congressional lobbying, they’ve set their sights on the creation of an all-inclusive global financial empire. The US Constitution is the de facto “Charter” of that Empire. Only we, the people, can amend it, and in doing so, restore the Republic.


mary mary's picture

Again, those Macro Surprise Index charts look bullish to me.