WHEN: Today, Thursday, February 22, 2018
WHERE: CNBC's "Squawk Box"
Following are excerpts from a CNBC interview with Federal Reserve Bank of St. Louis President James Bullard on CNBC's "Squawk Box" (M-F 6AM – 9AM) today, Thursday, February 22, 2018. Bullard joined the "Squawk Box" cast as a guest co-host from 6AM – 7AM. Following are links to video of the interview on CNBC.com: https://www.cnbc.com/video/2018/02/22/feds-james-bullard-on-economic-growth-forecasts.html?play=1 & https://www.cnbc.com/video/2018/02/22/feds-james-bullard-on-rate-hike-concerns.html?play=1.
All references must be sourced to CNBC.
James Bullard on 2017:
YOU KNOW, 2017 WAS A GOOD YEAR. U.S. ECONOMY SURPRISED TO THE UPSIDE. GLOBAL ECONOMY SURPRISED TO THE UPSIDE EVEN MORE THAT THE U.S. THAT DROVE EARNINGS. THAT DROVE A GOOD YEAR FOR US EQUITIES SO IT WAS NATURAL FOR US TO BE MEETING IN JANUARY AND SAYING GOOD THINGS ABOUT 2017. SO I THINK THAT PART IS ACCURATE.
James Bullard on 2018:
THE IDEA THAT WE HAVE TO GO 100 BASIS POINTS IN 2018, THAT SEEMS LIKE A LOT TO ME. THAT'S KIND OF PRICED FOR PERFECTION. EVERYTHING WOULD HAVE TO GO JUST RIGHT. THE ECONOMY WOULD HAVE TO SURPRISE TO THE UPSIDE A BUNCH OF TIMES DURING THE YEAR. I'M NOT SURE IF THAT'S A GOOD WAY TO THINK ABOUT 2018.
James Bullard on inflation:
WE'VE GOT CORE PC INFLATION AT 1.5%. MARKET BASE CORE IS AT 1.2% YEAR OVER YEAR. SO, YOU KNOW, WE'VE GOT A WAYS TO GO ON THIS INFLATION STORY. INFLATION HAS BEEN BELOW TARGET FOR A LONG TIME HERE. I DON'T THINK WE HAVE TO BE IN ANY HURRY.
James Bullard on global rates:
EUROPE, ESPECIALLY I THINK, SURPRISED TO THE UPSIDE. SO IF THEY HAVE ANOTHER GOOD YEAR, I WOULD EXPECT UPWARD PRESSURE ON RATES FROM THAT. ARE THEY GONNA HAVE ANOTHER GOOD YEAR? YOU KNOW, I DON'T KNOW ANY BETTER THAN ANYONE ELSE. BUT AGAIN, IF THE LONG END IS MOVING UP IN TANDEM WITH BETTER GROWTH PROSPECTS WORLDWIDE, THEN THE BOND MARKET IS DOING OUR WORK FOR US. THAT DOESN'T MEAN THE FED HAS TO MOVE TO A RESTRICTIVE STANCE.
James Bullard on 100 basis points:
THIS IS CONTINUITY. IT'S ALL ABOUT CONTINUITY. VERY SIMILAR TO THE YELLEN POLICY. VERY DELIBERATE. VERY DATA DEPENDANT. AND YOU KNOW, THE IDEA THAT WE'RE GOING TO GO IN LOCKSTEP WITHOUT PAYING ATTENTION TO THE ECONOMY, THAT'S TOO MUCH. I THINK THAT'S GOING TO BE DATA DEPENDANT. AND A LOT OF THINGS WOULD HAVE TO GO RIGHT THROUGH 2018 TO GET THE FULL 100 BASIS POINTS COMING IN.
James Bullard on interest rates:
BASED ON A CONCEPTION OF THE 80s AND 90s, WHICH IS NOT WORLD WE'RE LIVING IN TODAY. I THINK WE'RE JUST LIVING IN A LOWER LEVEL OF INTEREST RATES TODAY AND WE DON'T HAVE TO DO AS MUCH TO GET TO NEUTRAL.
James Bullard on reactive vs. proactive:
INFLATION WOULD HAVE TO MOVE UP FROM WHERE IT IS NOW, AT LEAST GET UP TO TARGET AND INFLATION EXPECTATIONS WOULD HAVE TO BE HIGHER THAN THEY ARE TODAY. THEY HAVE MOVED UP BUT THEY'RE STILL A LITTLE BIT SHY OF WHERE THEY WOULD NEED TO BE. AND YOU WOULD HAVE TO HAVE THE IDEA THAT WERE GOING TO BE TAMP DOWN ON INFLATION MOVING BACK TO TARGET FROM THE HIGH SIDE, BUT WE'RE NOT IN THAT ENVIRONMENT RIGHT NOW. CORE PC INFLATION AT 1.5%.
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