Ellen Freilich contributed to this post
Talk about getting a word in edgewise. St. Louis Federal Reserve Bank President James Bullard got almost a full sentence in the central bank’s prized policy statement.
Some background: Bullard dissented at the Fed’s June meeting, arguing that, “to maintain credibility, the Committee must defend its inflation target when inflation is below target as well as when it is above target.” The latest inflation figures show the Fed’s preferred measure at 0.8 percent, less than half the central bank’s target.
Fast-forward to yesterday’s policy statement, which included the following new language:
The Committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term.
As Michael Derby suggests here, that’s no small feat for a regional Fed president. Their lot is not normally as influential as the institution’s Washington-based board. The new verbiage was enough to prevent the often vocal Fed official from dissenting again.