Inflation nowhere on the horizon, Fed's Bullard says
A top US central bank official said at the end of the week he did not see any excess inflation on the horizon for over the next two years.
In remarks to Bloomberg TV, St.Louis Federal Reserve president James Bullard also stressed that rate-setters in the States should heed the message coming from the Treasury yield curve, namely that inflation pressures were scant.
That message was backed-up by prices in the market for inflation-protected US Treasuries or TIPS.
Bullard also said that in his opinion too much emphasis was being put on low unemployment, going on to say that the so-called 'Philips curve' had not been working for the last 20 years.
You would need a one percentage point gap between the rate of unemployment and the 'natural' rate of unemployment in order to generate an additional increase of 10 basis points in the annual rate of consumer price inflation, he said.