St. Louis Federal Reserve President James Bullard has stated that following this month's larger-than-usual 50-basis-point rate cut, the Fed should revert to a more "gradual" approach to rate reductions.
Bullard believes that the U.S. economy could respond "very positively" to a more accommodative financial environment, which could stimulate demand and extend the time needed for the Fed to bring inflation down to 2%.
He emphasized the importance of easing off the brakes at this stage and gradually reducing policy restrictions. According to forecasts released at this month's meeting, Bullard is one of the officials expecting more than a 25-basis-point rate cut for the remainder of this year.
