Fed’s Bullard: Asset Purchases Don’t Have Much Value Now

The transcript discusses the need to start tapering due to concerns about inflation and the potential need to raise interest rates sooner than expected. The speaker emphasizes the importance of optionality in economic policy for 2022, aiming to complete tapering by the end of the first quarter. They plan to assess economic conditions, including job reports, to determine if inflation is moderating. If inflation is not moderating, more aggressive policy actions may be necessary. The overall strategy is to phase out purchases and provide flexibility in 2022.

What factors should be assessed to determine the state of the economy by the end of the first quarter?

What actions might be taken if inflation is not moderating?