Jim Bullard, Former St. Louis Fed President, spoke with Bloomberg following remarks from Fed Chair Jerome Powell at the Jackson Hole Economic Symposium. Bullard says he believes the committee is nervous about the slowing labor market and that the policy rate, while already moderately restrictive, could come down some.
Federal Reserve Chair Jerome Powell carefully opened the door to an interest-rate cut in September, pointing to rising risks for the labor market even as worries over inflation remain.
“The stability of the unemployment rate and other labor market measures allows us to proceed...
Questions asked in this interview
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1:14How would a chairman execute those two Americas? Everything all the way around?
2:37Is it enough to really add on to our present GDP?
7:17As someone who is thought to be a contender to become the next Fed chair, Jim, how much does it concern you that there's this increasing political noise around the seat and exactly what the path of policy forward looks like?
8:38If you were on the Fed currently and you did see yields in the long end moving up in response to near-term Fed rate cuts, what would you do?
10:05Chairman Bullard, is your first act if you take over the Fed to get rid of the dots?
11:00Jim Bullard, with great respect, how do we get to that more disciplined study around the game of the Fed and regime change?
He used the speech to solidify expectations for 25 basis points in September. I was expecting that anyway, markets were expecting that. He leaned in to the most recent labor market report, which was very soft. And so I think that's a done deal. He didn't say too much about beyond that. What you want to do with the October meeting or the December meeting? I have said 100 basis points going into 2026. So I think you could adjust as you go forward and eventually get a full 100 basis points. But I would go slowly in order to watch the data. And then on the framework review, I'm sure much earlier in the year that they had targeted that they would have the framework discussion and that they would use the Jackson Hole speech to talk about changes to the framework. I thought those were thoughtful and they're well presented in this speech, and they're about what many have speculated on. So I think they did about as much as they can on the framework side.
Jim Bullard, Tom Keene. And good morning to you. I definitely consider this my conversation of the day. You served a lengthy term at the St. Louis Fed. You have lived the decline of a greater economy your decades and decades ago in the effort to provide for a resurgent St. Louis. Is the next chairman of the Fed, whoever that may be, do they have to manage for two American economies: a technology-driven, exceptional economy, and another, to use their cliché, America flat on their back? How would a chairman execute those two Americas? Everything all the way around?
Yeah. I think income and wealth distribution have become more salient topics for the Fed. It's not that clear how much the Fed can really do providing interest rate policy for the whole economy. If you change the rate structure that affects everyone, not just one particular group that you might be targeting. So I think that's been something we've had to wrestle with. And I've actually done research on it myself to try to understand it better from my point of view. So I think there's been a theme for a while and that'll be an important theme in macroeconomics going forward.
Mike McKee's got a lot of smarter questions for me on the immediacy of this speech. I'm going to ask one more distant question. Jim Bullard, you're at Purdue executing online technology education every single day. How do you define the new technology productivity that America faces? Is it enough to save us? Is it enough to really add on to our present GDP?
Oh, yeah. I think that the AI boom is a general purpose technology that will diffuse through the economy. I think the key question is how fast does that actually diffuse? And sometimes markets can get ahead of themselves and think it's going to happen sooner, sometimes too late, and it happens faster than markets think. But nevertheless, any way you look at it, it's an important technology. It can drive productivity. And I think in higher education, this is one of the places where you can really have the biggest impact. We put an AI requirement in at the Daniels School here for every single student, and we're trying to expand that to all Purdue. So I think that just shows you how important this technology is.
Jim, it's Mike McKee. I have a question about sort of the process involved in this speech. The chairman is giving his own speech, but basically, when he says it's time to maybe adjust policy, he's speaking for the entire Open Market Committee. Going into a speech like this, would he have polled everybody? Does he think he has the votes for that? Because we've been speaking with Fed officials here in Jackson Hole and there are still some who are saying, well, we're not sure that we need to do that yet.
He's going to report on the center of gravity of the committee, even though there might be people that have misgivings. At the June meeting, the committee had a median dot plot of two rate reductions by the end of the year, and I think the minutes suggested something that was more like 50-50. But then the labor market report came in. I think that tilted the balance. So he could have pushed back a little bit. I think financial markets were expecting him to be a little bit more hawkish here and try to set up a 50-50 meeting where you would wait and see for the rest of the data to come in. But I don't think that's where the center of gravity is on the committee. So he went ahead and leaned in. I thought there was quite a bit of talk about the labor market at the beginning. You could have had a little more emphasis on the low unemployment rate, for instance. And he did come out at the end of that discussion saying, well, it's in balance, but we're a little bit nervous. So I think he's accurately describing where the bulk of the committee is.
Well, where would you be on this question? Because we've heard the Fed officials for some time now saying, yes, we had poor job creation in recent months, but the unemployment rate, as you just mentioned, has been low and they've described the labor market as solid. Now, this seems to be sort of a major shift in the way they view the outlook and the sort of balance between the two mandates.
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Bullard, J. (2025, August 22). 'Committee is Nervous' on Labor Market, Jim Bullard [Interview transcript]. Bloomberg Podcasts. CEOInterviews.AI. https://ceointerviews.ai/interview/573896/
MLA
James Bullard. "'Committee is Nervous' on Labor Market, Jim Bullard." Bloomberg Podcasts, 22 Aug. 2025. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/573896/.
BibTeX
@misc{bullard2025_573896,
author = {James Bullard},
title = {'Committee is Nervous' on Labor Market, Jim Bullard},
howpublished = {Interview transcript, Bloomberg Podcasts. CEOInterviews.AI},
year = {2025},
month = {aug},
url = {https://ceointerviews.ai/interview/573896/},
note = {Speaker-attributed transcript with timestamps}
}
