Fed's Bullard Won't Rule Out 75 Basis Point Hike

The transcript discusses the 1994 policy rate increase of 300 basis points, which was successful in setting up a strong US economy in the late 1990s. It highlights a 75 basis point increase during that cycle and suggests that while such an increase is not the base case now, it is not ruled out. The current market pricing is doing some of the work for the Fed, reducing the need for surprises. The focus is on ratifying promised increases in the funds rate, unlike in 1994 when the Fed had less credibility on its 2% inflation target.

What was the outcome of the 1994 policy rate increase?

• It caused hyperinflation.

• It set up a strong economic period in the late 1990s.

• It had no significant impact.

• It led to a recession.

What is the speaker's stance on a 75 basis point increase?

• It is already implemented.

• It is possible but not the base case.

• It is ruled out completely.

• It is the base case.

How does market pricing assist the Federal Reserve according to the speaker?

• By doing some of the work for the Fed.

• By causing economic instability.

• By increasing inflation.

• By decreasing interest rates.

What is the current need for surprises in rate increases compared to 1994?

• Surprises are no longer possible.

• The need for surprises is the same.

• There is less need for surprises now.

• There is a greater need for surprises now.

What is the main action needed regarding the funds rate according to the speaker?

• To decrease it immediately.

• To ratify the promised increases.

• To ignore market pricing.

• To set a new inflation target.