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St. Louis Fed president James Bullard was the only one of 17 Fed officials not to project a long-run interest rate—displayed in the Fed’s so called “dot plot”—at the Fed’s two-day meeting this week.
Bullard claimed the dot Friday, saying that the St. Louis Fed is switching to a new forecasting style without a long-run estimate.
“The forecast simply stops at two and a half years,” he said. His 30-month outlook predicts mean inflation of 2%, unemployment of 4.7% and output growth at 2%, Bloomberg reports.
Bullard also has a dovish outlook on rate increases, predicting just one rate hike in 2016, none in 2017, and none in 2018.
He says the long-run forecast’s usefulness may have ended in the last year, as the economy doesn’t go toward a single steady state in the long run, depending on things like productivity growth. [Bloomberg]
