Fed’s Bullard says interest rate policy is ‘behind the curve,’ but it’s making progress

The Federal Reserve needs to raise interest rates substantially to control inflation but may not be as “behind the curve” as it appears, St. Louis Fed President James Bullard said Thursday.

One of the Federal Open Market Committee’s most “hawkish” members in favor of tighter policy, Bullard said a rules-based approach suggests the central bank needs to hike its benchmark short-term borrowing rate to about 3.5%.

However, he said bond market adjustments to the Fed’s more aggressive policy, in which yields have surged higher, suggest rates are not that far askew....