"Wall Street Has Called This About Right," Says Fed Official About Markets
James Bullard, president of the St. Louis Fed, believes the market hitting an all-time high is justified, according to Business Insider.
In an interview with Reuters, he stated that the rally is plausible despite the coronavirus crisis. He believes the US economy will perform better than economists are predicting as the world continues to live and work with the pandemic. "I think Wall Street has called this about right so far," Bullard said. For example, he stated that companies like Walmart have been able to adapt and operate safely throughout the pandemic.
"There is a lot of ability to mitigate and proceed and most of the data has surprised to the upside ... So I think we are going to do somewhat better," he said. "I expect more businesses to be able to operate and more of the economy to be able to run successfully in the second half of 2020."
However, Bullard's views contradict the Federal Open Markets Committee's minutes released yesterday. The FOMC believes that "the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term." Bullard will become a voting member of the FOMC in 2022. He believes US GDP will contract by 4 percent, far less than the 6.5 percent his colleagues predict.
Bullard also doesn't believe any further stimulus is currently needed in the US. He believes additional stimulus should be considered once the pandemic is contained. "At least for now expectations are that the Fed will stay where we are for a very long time," he said. "The idea that you want to stimulate things presupposes that the virus has gone away."