Federal Reserve (Fed) policymaker James Bullard has declared that the path of inflation in the U.S. is "worrisome", speaking in Tokyo on Friday.
The U.S. central bank's plan for raising interest rates in the coming years is also too aggressive, asserted the St. Louis Fed president, whose dovish views are well-known.
The comments caused a minor rally in U.S. Treasury bonds with the yield on 10-year securities dropping by around 1 basis point to 2.24 percent and causing a mild flattening of the yield curve.
Bullard drew attention to the current level of U.S. prices, noting the gap between where they now stand and where he says they should be if the Fed had been able to deliver on its 2 percent inflation target in recent years.
The policymaker – who isn't currently a voting member of FOMC (Federal Open Market Committee) - claimed that U.S. prices now fall 4.6 percent short of the price level path established between 1995 and 2012, when inflation was accelerating at a pace closer to the Fed's annual target.
"This is not as severe as the 1990s Japanese experience, but it is worrisome," said Bullard, who delivered a prepared speech at Keio University and then subsequently spoke informally with reporters.
Turning to the Fed's rate hike plans, Bullard reiterated his long-standing view that the U.S. central bank is seeking to hike rates too quickly and by too much. He also posited that the financial markets' view of the upcoming rate hike trajectory is currently out of lockstep with that of the Fed.