Issues that deterred Fed from September rate hike largely disappeared: Bullard

Julie C. Nichols General

Reblogged from Reuters

Fed’s Bullard sees ‘hot’ debate brewing after first rate hike

Debate within the U.S. Federal Reserve will quickly turn to the appropriate pace of monetary policy tightening after an initial rate hike, a battle that may be fought in an environment of unexpectedly higher inflation, St. Louis Fed President James Bullard said on Friday. The unexpectedly strong U.S. jobs report on Friday raised the already strong likelihood that the central bank will raise rates in December, ending a seven-year run of near-zero policy.

But Fed policymakers will then have to tangle with how to make good on their promise of only raising rates "gradually" as they move forward, a debate that may come amid rising U.S. inflation and a jobless rate falling to as low as 4 percent, said Bullard, who is in favor of a rate hike and will become a voting member of the Fed’s rate-setting committee next year.

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