New York (CNN Business)St. Louis Fed president James Bullard says the US economy hasn’t turned the corner fully — but stimulus and America’s vaccination effort could help get the United States out of its current economic crisis.
And the sugar rush from trillions of dollars pouring into the economy could help America grow faster than China this year.First Move’s Julia Chatterley spoke to Bullard Thursday.You’re optimistic on the US recovery. Talk us through what you see today, and what you see going forward.Bullard: Well, i think the data on the pandemic in the US suggests that the pandemic is coming to a close. There continue to be risks out there, but it’s certainly very encouraging. We have a vaccine rollout that has gained steam, and if you look at the data, that looks very good, and that suggests that the US economy is poised to boom in the year ahead here. I’ve got 6.5% growth for the US economy [this year]. That’s very, very strong growth for this economy, possibly faster than China this year, and I think labor markets will improve dramatically from where they are right now, but we have to get the pandemic under better control than what we have today, but we’re moving in the right direction. So i am pretty optimistic that we can get this boom to occur. We can bring this episode to a close for the US.Read MoreHow Prince Harry got his new jobWhen we’re talking about using words like boom, it makes me think we’re out of the crisis. Are we out of the crisis, Jim, at this state? Bullard: No. I think we’re still in the crisis because we, you know, we still have cases. There’s a lot of human tragedy here. You’ve got the fatalities per day per million still somewhat elevated, but declining and predicted to continue to decline as we go through April and May here, and so that’s the sense in which we’re going to be able to bring this under control. We’ve got more and more people getting vaccinated every day, and that looks set to continue. Also we’re vaccinating, you know, on average the more vulnerable parts of the population. That should help bring fatalities down dramatically and increase confidence in the economy and allow us to get the rest of production up and running, and allow people to go back to work. So there are a lot of good things happening. There are risks. It is a crisis. You’re never sure what might lie just around the corner, and we’re certainly aware of that. We’re tracking the data every day. Slack CEO apologizes for his unforced errorCertainly for bond market investors, they’re looking at the data. They’re predicting ahead and jumping ahead as they always do, and sort of assuming the Fed must be talking about tighter policy in some form going forward. Is there any way in which the bond yield could go to where we’re uncomfortable with this? Bullard: Yeah. I would say the runup in the ten-year yields since the, you know, in recent months has been in reaction to better forecasts for the US economy and higher inflation, expectations. The TIPS market is suggesting that inflation expectations have moved up quite a bit from where they were earlier, and so it makes sense that you would have somewhat higher, longer term yields with this kind of look, and so i think that part is a good sign. It’s healthy. Healthy part of the economy, you know, could this run away from us and — and actually damage the economy? I don’t think we’re close to that right now. The levels are at — just now at the pre-pandemic level and those were kind of low compared to where we have been historically. So i think we like the market signal from the tenure on the effectiveness of our policies and the reading on inflation expectations that we can get from it.