Senior economics reporter
St. Louis Fed President James Bullard’s top deputy is one of President Donald Trump’s picks for a two vacancies on the central bank’s board of governors.St. Louis Fed President James Bullard on Tuesday said he has one more interest-rate hike “penciled in” for 2019. In an interview with Agence France Press, Bullard didn’t seem ready to pull the trigger quickly on another easing step. Bullard said he wanted to see how the economy responded to the quarter-point cut approved last week.The Fed’s interest-rate committee next meets in mid-September. In a Tuesday speech after the interview was published, Bullard pushed back on the idea that the Fed would make interest-rate decisions going forward based on developments in the trade fight between the U.S. and China. “U.S. monetary policy cannot reasonably react to the day-to-day, give-and-take of trade negotiations,” Bullard told the National Economic Club in Washington. While global trade uncertainty is “a key risk,” Bullard said trade tension is likely to persist, in one form or another, for “years ahead.” Read: San Francisco Fed’s Daly says she’s focused on trade tensions “Recent developments in global trade negotiations suggest that it will be difficult to reach a stable global trade regime over the forecast horizon,” Bullard said. High trade uncertainty was something that is already “judgementally factored into my monetary policy calculus,” he added. U.S. stocks
staged a recovery Tuesday from Monday’s performance, the worst of the year, as investors digested the latest developments in the intensifying trade spat. Stocks midday Tuesday were off their best levels of the session, and the Dow had briefly again turned negative. Bullard is a leading dove on the Fed’s interest-rate-setting committee this year. His views have won favor at the White House, which briefly considered him for a seat on the Fed board of governors. Instead, President Donald Trump has tapped Christopher Waller, Bullard’s top deputy on economic policy, for one of the two open seats on the seven-member board.