3:40 PM » Fed's Bullard still sees first rate hike in March
WASHINGTON (MarketWatch) - St. Louis President James Bullard said Thursday he would still like to see the central bank raise interest rates for the first time this cycle in March 2015. "The end of the first quarter of 2015 is still my preferred liftoff date," Bullard said in an interview with The Wall Street Journal. Bullard is not a voting member of the Fed this year. A March rate hike is sooner than a move in the third or fourth quarter signaled by Fed Chairwoman Janet Yellen and her allies on the Fed's policy committee. A March rate hike would be a surprise to markets, said Jan Hatzius, chief economist of Goldman Sachs, in an interview with MarketWatch. Bullard said an early move was justified because the Fed is now closer to the central banks twin goals of 2% inflation and low unemployment than policymakers expected. In addition, the second quarter growth showed that the weak first quarter was an anomaly, he said. Investors have a right to worry about the Fed falling behind the curve on inflation, he added. "That's certainly been the history of the institution," Bullard said. Falling behind the curve means that the central bank has already allowed inflation to rise and will eventually have to raise rates quicker and higher than expected to dampen price pressures.