When Fed Doves Turn Hawkish, it Gets Real: Fed Dove Bullard Gets Antsy About Inflation, Pulls Rate Hike into 2022, Sees Quicker Tapering with MBS Amid “Threatening Housing Bubble”

by Wolf Richter
Wolf Street

“So far so good. But we have to be nimble here, these are big numbers.”

One of the big Fed doves, St. Louis Fed President James Bullard, is making “hawkish” noises, projecting higher inflation and pulling the first rate hike into 2022, after the Fed pulled the first two rate hikes into 2023 on Wednesday, from 2024 back in March. Things are tightening up quickly here. It’s when the doves turn “hawkish,” as it were, that things get real at this Fed.

The “hawks” – in reality, there are no hawks on this Fed, there are only folks who are more or less dovish – have already spoken, and no one paid attention. For example, over a month ago, Dallas Fed President Robert Kaplan once again pointed at surging inflation and all kinds of distortions, including in the housing market, and advocated for tapering purchases of mortgage backed securities, “sooner rather than later.” At the time, he was the odd man out.

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