St. Louis Federal Reserve President James Bullard said he believes that further interest rate hikes by the central bank could drag the U.S. into a recession, according to comments he made in an interview with The Wall Street Journal.
Bullard's stance isn't new - he has opposed much of the Fed's current stance on raising interest rates from historically low levels. Bullard, who holds a vote on Fed rate policy, told the Journal that he would even be open to cutting rates if the economy or inflation slowed more than expected.
The Fed currently has an overnight target rate range of between 2.25% and 2.5%. It raised rates in December for the fourth time in 2018, and has signaled two rate increases this year.
Bullard's comments mirror Fed Chairman Jerome Powell's own softening stance on rate hikes in recent weeks. Amid growing pressure from President Donald Trump to keep interest rates low, Powell said that the Fed was open to changing course on the two planned rate hikes in 2019 if need be.
"With the muted inflation readings that we've seen coming in, we will be patient as we watch to see how the economy evolves," Powell said last week.
Powell also pushed back against Trump and defended the Federal Reserve's autonomy amid reports that Trump has been asking aides whether he has the power to fire the man he appointed a little more than a year ago.
Atlanta Fed President Raphael Bostic, scheduled to speak at the Chattanooga Area Chamber of Commerce Breakfast on Wednesday, also suggested a cautious approach in prepared remarks when it comes to raising rates.
Bostic said he he believes the Fed's previous 25-basis-point increase likely brought the interest rate "close to achieving a neutral policy stance."
"I say 'likely' because the neutral interest rate is not something we directly observe, but is something that we infer from mounds of data, economic and statistical models, and a healthy dose of judgment. There's a fair amount of uncertainty regarding these estimates of the neutral rate, so we need a data-dependent approach to monetary policy going forward," Bostic said.
Chicago Fed President Charles Evans announced a similar stance in prepared remarks Wednesday, saying that Fed rate hikes should be tied to the economic environment.
"As we move forward in this fluid environment, I will be particularly attentive to factoring the incoming information into my assessment of the economy and the balance of risks to the outlook. And it is this outlook and risk assessment that will determine my views about the appropriate monetary policy we need to follow to achieve our dual mandate objectives of price stability and maximum employment," Evans said.