Bullard also said he sees unemployment falling to 6.5% by the end of the year, an estimate well below the median Fed projection of 7.6%.
While the move to "average inflation targeting" is in a respect historic, market participants remain largely skeptical that the Fed can achieve its goal.
The Federal Reserve kept its pledge to keep interest rates near zero and promised to keep rates there until inflation rises consistently. Former Federal Reserve Gov. Sarah Bloom Raskin; Seth Carpenter, chief economist at UBS; and Paul McCulley, former chief economist at PIMCO, join 'Closing Bell' to provide analysis of the Fed decision, and what it means that they likely won't raise interest rates until 2024 at the earliest.
The Federal Reserve kept its pledge to keep interest rates near zero and promised to keep rates there until inflation rises consistently. Former Federal Reserve Gov. Sarah Bloom Raskin; Seth Carpenter, chief economist at UBS; and Paul McCulley, former chief economist at PIMCO, join 'Closing Bell' to provide analysis.
The Federal Reserve kept its pledge to keep interest rates anchored near zero and promised to keep rates there until inflation rises consistently.
The Federal Open Market Committee will provide its quarterly update on where it sees GDP, unemployment and inflation heading.
Whether the Fed's policies and rising U.S. debt will spike inflation has yet to be seen, but the topic is dividing Wall Street.
"If you look at the supply side, it is unambiguously inflationary," Mohamed El-Erian, chief economic advisor at Allianz, told CNBC's "Squawk Box" on Monday. "What we need for inflation is for the demand side to come back. That is where the uncertainty is right now."
U.S. consumer prices increased solidly in August, but labor market slack is likely to keep a lid on inflation as the economy recovers from the Covid-19 recession.
The stock market's mixed messages suggest it's still dealing with some critical issues that could weigh on its prospects, top market watchers say.
On the budget deficit, he said the federal government's spending imbalance is "getting out of hand."
Former Federal Reserve Chairman Alan Greenspan joins 'Squawk on the Street' to talk about what he foresees as big problems heading our way in the economy and markets.
Former Federal Reserve Chairman Alan Greenspan joins 'Squawk on the Street' to discuss his views on the U.S. economy. "If anything we are underestimating the size of the budget deficits down the road. I would say all and all my major concern is inflation. It obviously hasn't emerged in any significant way yet but that's where the problems lie and hopefully we'll get new insight on the virus," Greenspan said.
U.S. producer prices rose a bit more than expected in August as the cost of services increased solidly, while underlying producer inflation continued to firm.
Despite weakness in some sectors, China will likely post "fairly solid" GDP growth in the third quarter as its economy stabilizes from the hit from the coronavirus pandemic, says Sian Fenner of Oxford Economics.
Experts have said that while there is no pressing food shortage, farms have been roiled as the coronavirus pandemic upended supply chains and curbed movements.
Certain markets may already be telling us that the Fed's new policy framework is going to have unintended consequences.
Jim Caron of Morgan Stanley Investment Management says that as the Fed moves to a flexible average inflation target, they are signalling that they will keep interest rates low even in the event of an economic recovery.
Michael Fredericks of BlackRock predicts that Federal Reserve Chairman Jerome Powell's Jackson Hole speech on Thursday could include discussion of symmetrical inflation goals and "letting inflation run hot". He suggests Powell would have to be significantly more hawkish than expected to cause a significant market shock.
"I don't think it can keep going up forever at this pace. I think there will be a pause at some point," Carlyle Group co-founder David Rubenstein told CNBC on Monday