James Brian Bullard (born February 28, 1961) is an American economist who served as the chief executive officer and 12th president of the Federal Reserve Bank of St. Louis, a position he held from 2008Press Release | Federal Reserve Board Jan. 21, 2021. until August 14, 2023. In July 2023, he was named dean of the Mitch Daniels School of Business at Purdue University.
Early life and education
Bullard was born in Columbus, Wisconsin, and grew up in Forest Lake, Minnesota.James Bullard biography. Retrieved June 4, 2012. He received bachelor's degrees in economics and in quantitative methods and information systems from St. Cloud State University in 1984 and a Ph.D. in economics from Indiana University in 1990.James Bullard Vita. Retrieved June 4, 2012.
Career
Bullard began his career as an academic economist and monetary policy scholar. His research has appeared in numerous professional journals, including the American Economic Review, the Journal of Monetary Economics, Macroeconomic Dynamics and the Journal of Money, Credit and Banking.James Bullard Bio. Retrieved Oct. 17, 2013.
Federal Reserve Bank of St Louis
Serving 15 years as the sitting president and chief executive officer of the Federal Reserve Bank of St. Louis, Bullard earned praise and accolades for his leadership as part of the Federal Open Market Committee (FOMC) in guiding the direction of U.S. monetary policy. A noted economist and scholar, Bullard had been the longest-serving Federal Reserve Bank president in the country and ranked as the seventh-most influential economist in the world in 2014. His scholarly impact has been based on research-based thinking and intellectual openness to new theories and explanations. That allowed Bullard to be an early voice for economic change, helping the Federal Reserve navigate complex economic landscapes such as the COVID-19 pandemic and the financial crisis during his tenure.
Before becoming president in 2008, Bullard served in various roles at the Federal Reserve Bank of St. Louis, starting in 1990 as an economist in the research division and later serving as vice president and deputy director of research for monetary analysis. For 15 years, he directed the activities of the Federal Reserve's Eighth District, which branches into several states, including an extensive portion of southern Indiana. While serving on the Federal Reserve's Open Market Committee, Macroeconomic Advisers named Bullard the FOMC's second biggest mover of markets in 2010 behind Chairman Ben Bernanke and the biggest mover of markets in 2011 and 2013.
Other Bullard served as an honorary professor of economics at Washington University in St. Louis, where he also sat on the advisory council of the economics department as well as several advisory boards. The St. Louis Post-Dispatch named him the Top Workplace Leader among the region's large employers as part of its 2018 Top Workplace Awards. Active in the community, Bullard has served on the board of directors of Concordance Academy of Leadership in St. Louis and was formerly the board chair of the United Way U.S.A. He is coeditor of the Journal of Economic Dynamics and Control, a member of the editorial advisory board of the National Institute Economic Review and a member of the Central Bank Research Association's senior council.
Financial media accolades and appearances In February 2011, Bullard was named in a Bloomberg.com article as "a bellwether person," an "indicator of where the full committee (of the FOMC) is heading.""Bullard is bellwether as Fed weighs duration of asset purchases", Bloomberg, February 24, 2011 Macroeconomic Advisers named Bullard the FOMC's second biggest mover of markets in 2010 behind Fed Chairman Ben Bernanke"Announcing MA's Who Moved Markets in 2010", Macroadvisers, March 30, 2011 and the biggest mover of markets in 2011"Who Moved Markets in 2011?" Macroadvisers, Jan. 27, 2012. and 2013."MA’s Yearly Fedspeak Rankings: Who Moved Markets Most?" Macroeconomic Advisers, March 6, 2014. Macroeconomic Advisers noted that, in 2011, his speeches and interviews moved the two-year Treasury yield by almost 17 basis points and, in 2013, he moved the 10-year yield by 29 basis points on a cumulative basis. Since 2010, Bullard has appeared numerous times as a host and commentator on CNBC, CNN, Bloomberg Television, BNN and Fox Business, among other media outlets.
Public positions
New approach to projections
In 2016, Bullard announced a new approach for the St. Louis Fed's near-term U.S. macroeconomic and monetary policy projections. The new approach is based on the idea that the economy may experience one of several possible persistent regimes, which involve a combination of recession or no recession, high or low productivity growth, and high or low real returns on short-term government debt. While switches between regimes are possible, they are difficult to forecast. This contrasts with the more traditional approach to monetary policy projections, which assumes that the economy will converge to one single, long-run steady state.James Bullard | Executive Bios | St. Louis Fed
In the statement released June 17, 2016, Bullard said the current regime is characterized by low productivity growth, low real returns on short-term government debt and no recession. "Policy is regime dependent, leading to a recommended policy rate path which is essentially flat over the forecast horizon," he said, where the forecast horizon is two to three years.The St. Louis Fed's New Characterization of the Outlook for the U.S. Economy June 17, 2016.
He explained the need for a new approach in a speech on June 30, 2016. Given that the cyclical dynamics that resulted from the recession appeared to be over, Bullard said: "It no longer made sense to submit a forecast of output growing above trend, unemployment continuing to decline, inflation rising above target, and the policy rate increasing at a fairly steep pace. We needed to rethink our approach to forecasting."A New Characterization of the U.S. Macroeconomic and Monetary Policy Outlook June 30, 2016.
Deflationary danger
In November 2009, Bullard opined that the central bank should extend its mortgage-backed securities buying program beyond its expiration date in March 2010, which would (according to the New York Times) keep interest rates low and help keep the dollar weak.
During the summer of 2010, Bullard warned that the U.S. economy was at risk of becoming "enmeshed in a Japanese-style deflationary outcome within the next several years," a view he presented in his research paper, "Seven Faces of 'The Peril.'""Seven Faces of 'The Peril'", Federal Reserve Bank of St. Louis Review , September/October 2010. Retrieved April 4, 2012. According to the New York Times, Bullard "had been viewed as a centrist and associated with the camp that sees inflation, the Fed's traditional enemy, as a greater threat than deflation," along with Charles I. Plosser, then-president of the Philadelphia Fed; Richard W. Fisher, then-president of the Dallas Fed; and Thomas M. Hoenig, then-president of the Kansas City Fed. Laurence H. Meyer, a former Fed governor, said Bullard's new position was "very significant .... He has been one of the most hawkish members." More concerned with the risk of deflation (i.e. less hawkish) were Eric S. Rosengren, Boston Fed; Janet L. Yellen then-president of the San Francisco Fed and former chair of the Federal Reserve; and William C. Dudley, New York Fed.Fed Member’s "Deflation Warning Hints at Policy Shift" by Sewell Chan, The New York Times, July 29, 2010. Retrieved 2010-07-29.
In his "Seven Faces" paper, Bullard argued it may not be prudent to rely on a near-zero policy rate alone to keep the U.S. out of the deflationary outcome; he recommended that current interest rate policy be supplemented with additional quantitative easing, an unconventional monetary policy tool.Federal Reserve Bank of St. Louis press release, Dec. 2, 2010. Retrieved April 4, 2012.
Quantitative easing
The Federal Reserve engaged in two large-scale asset purchase programs between 2009 and 2011, commonly referred to as the first and second rounds of quantitative easing, or QE1 and QE2. Both programs had detractors, including those who likened the policy to "printing money." Other economists said that QE2 either had no effect on the economy or was counterproductive."Economists give their eulogy for QE2", MarketWatch, June 22, 2011. Retrieved April 4, 2012. However, after QE2 ended in June 2011, Bullard said that QE2 worked and it "demonstrated that the Fed can conduct an effective monetary stabilization policy even when policy rates (the federal funds rate) are near zero.""QE2: An Assessment", speech by James Bullard, June 30, 2011. Retrieved April 4, 2012 Responding to Bullard's assertion, David Nicklaus of the St. Louis Post-Dispatch wrote, "The problem for the Fed, of course, is that neither QE1 nor QE2 has yet brought about a vigorous economic recovery ... Bullard and other Fed policymakers may be convinced that they have a powerful new tool at their disposal, but they still need to persuade the public that it works.""Public still remains skeptical of QE2 Effectiveness", St. Louis Post-Dispatch, July 1, 2011.
Bullard argued that while the effects of QE2 on the financial markets occurred during the run-up to the FOMC's decision to pursue the program, policymakers expected the effects on the real economy (e.g., consumption and employment) to occur between six and 18 months after the policy action—which happens with conventional monetary policy as well; but then analysts may have difficulty determining exactly which movements in real variables are due to monetary policy and which ones are due to other influences on the economy that occur in the meantime, he said. "Disentangling these effects is a standard problem in monetary policy analysis," he said, adding that "the real effects of the asset-purchase program will most likely be conventional, just as the financial market effects were.""The Effectiveness of QE2," The Regional Economist, July 2011."Bullard Says Fed's Extended Period Pledge for Rates Difficult to Prolong," Bloomberg.com, June 30, 2011. Retrieved April 4, 2012.
While Bullard has supported the Fed's use of quantitative easing, he argues that it is rarely optimal for the Fed to use the "shock and awe" approach to this policy, wherein the Fed announces a large purchase with a predetermined purchase size and fixed duration like QE2. Rather, he has stated he favors a "state-contingent" policy path similar to how the FOMC adjusts the federal funds rate on a meeting-by-meeting basis: "Any policy path should be reviewed carefully and seriously at each meeting for possible adjustment given the incoming data." “Monetary Policy and the U.S. Economy,” speech by James Bullard, Aug. 19, 2010.“QE2: An Assessment,” speech by James Bullard, June 30, 2011.
In the wake of QE2, Bullard maintained that even with the policy rate near-zero, the Fed still has tools to combat economic weakness. He called the central bank's balance sheet policy "the most natural and effective tool for this purpose.""America's Investment Problem and Monetary Policy," speech by James Bullard, Sept. 26, 2011. However, Bullard, along with then-president of the Dallas Fed Richard Fisher, disagreed with affixing a calendar date to policy. According to Reuters, "Bullard and Fisher do not represent the consensus view championed by Fed Chairman Ben Bernanke, who has strongly hinted at the possibility of further action. But they do remind investors that the central bank will not be united if it decides to delve even further into the realm of unconventional monetary policy.""Fed inflation hawks downplay need for easing", Reuters, Sept. 13, 2011. Retrieved April 4, 2012.