Federal Reserve's Bullard is expecting two rate hikes in the coming year

November 11, 2021: -St. Louis Federal Reserve President James Bullard told CNBC that he currently expects the U.S. central bank to hike its benchmark rate twice in 2022 after it’s finished winding down its bond-buying program.

Bullard adds that the caveat that his viewpoint was based on current economic data and that his prediction could change as time goes on.

“What we can do is assess the situation in the coming spring and see where we’re at, and at that point, we can make a decision about the policy rate,” Bullard told CNBC.

“Based on where I think we are today, I have two rate increases penciled in for 2022 that could change by the time we get into the first phase of the next year in either direction.”

Bullard, known to be more hawkish than different officials at the bank, has shown some anxiety at the increasing inflation levels. The new data out Tuesday showed U.S. wholesale prices increased 8.6% from a year ago in October, their highest annual pace in records going back coming 11 years.

Central banks would push up rates to tame inflation, and the Fed started to normalize policy after the economic fallout from the coronavirus pandemic. It said in the previous week that bond purchases would begin to taper later and acknowledged that price increases had been rapid and enduring than central bankers had forecast.

The Fed voted not to raise interest rates from their anchor near zero and warned against expecting imminent rate hikes. On the schedule, the reduction in bond purchases will conclude around July of the coming year. Officials have said they don’t envision rate increases starting until tapering is finished, and projections released in September indicate one hike at the most coming year.