Fed's Bullard: Recent inflation misses “not comforting”, markets may be losing faith inflation will abate

St Louis Fed President and 2022 voting FOMC member James Bullard said on Thursday that recent inflation misses are "not comforting" for policymakers who need to manage the risk that it will continue, according to Reuters. Moreover, Bullard continued, markets may be losing faith that inflation will abate and, thus,  front-loading rate increases would send the right signal that the Fed is serious about controlling inflation. Bullard criticised that there is too much "mind share" devoted to the idea that inflation will ease and the risk now is that it will not. Bullard added that there is not much risk of a recession coming from Fed policy. 

Market Reaction

Typically hawkish remarks from Fed's Bullard have not had that much impact on FX markets, with the DXY continuing to trade flat in the 95.70s area.