Fed’s Bullard Says Prospects for a US Soft Landing Are Rising

St. Louis Federal Reserve Bank President James Bullard stands with his back to the Teton mountain range outside the annual Kansas City Fed Economic Policy Symposium in Jackson Hole, Wyo., on Aug. 25, 2022. Ann Saphir/Reuters

St. Louis Federal Reserve leader James Bullard expressed optimism on Thursday that the new year could finally bring relief from inflation, adding the risk of a U.S. recession has fallen in recent weeks.

The rate-setting Federal Open Market Committee “has taken aggressive action during 2022, with ongoing increases in the policy rate planned for 2023, and this has returned inflation expectations to a level consistent with the Fed’s 2 percent inflation target,” Bullard said in material prepared for a presentation before a meeting held by the CFA Society St. Louis. “During 2023, actual inflation will likely follow inflation expectations to a lower level as the real economy normalizes,” he said.