Economy Can Take Higher Interest Rates: St. Louis Fed President

AP reports that the St. Louis Federal Reserve Bank President James Bullard stated in a recent interview that the economy is strong enough, based on recent job numbers so far this year, to accommodate further interest rate increases to battle inflation back to the Fed’s long term target of 2% from the current 8.6%.

“Now we have lots of inflation, but the question is, can we get (inflation) back to 2% without disrupting the economy? I think we can,” Bullard said in the Associated Press interview.

While production of new jobs has continued roughly apace with the 2021 recovery from two years of lockdowns, unfilled job openings are at a historic high of over 11.4 million, the participation rate in the labor market has still not recovered to pre-lockdown levels, and the number of first time unemployment applications has begun to spike.

The Association of Western Employers will continue to track this and other economic news in the coming days and weeks.

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