Fed's Bullard: Fed will need to be ready to make adjustments to tapering

"I didn't want to open the debate on tapering until the pandemic was more clearly under control but we're at that point now," St. Louis Fed President James Bullard said on Monday, as reported by Reuters.

Additional takeaways

"We're in a new era where inflation is above target."

"There doesn't seem to be much doubt about inflation being above target in 2021."

"The question is how quickly will that dissipate."

"I have inflation coming down to 2.4% in 2022."

"The debate is where does the monetary policy have to be to get the gentle glide back to 2% inflation."

"Part of the debate is on what does it mean to have inflation above 2% for some time."

"The tapering debate is open."

"This is not an environment where tapering could be put on automatic pilot."

"Fed will need to be ready to make adjustments to tapering."

"It's not like we're in a situation where the economy is exceptionally weak."

"Going into the crisis, the Fed expected to see problems in the housing market and none of that materialized."

"There's a good question about whether it's time to retire the Fed's intervention in the MBS market."

Market reaction

The US Dollar Index continues to push lower and was last seen losing 0.47% on the day at 91.88.