NEW YORK — St. Louis Federal Reserve President James Bullard cautioned Thursday that without central bank action on interest rates, inflation could become an even more serious problem.

He stated that “we’re more at risk than ever before in a generation, and this could get outof control,” during a Columbia University panel discussion. One scenario is that you have a surprise coming at us now that we don’t know about, and we will experience even greater inflation. We want that to never happen.

Bullard is making news recently with his calls for aggressive Fed action. In an attempt to stop price rises at their fastest rate in over 40 years, he has advocated that the July rates be raised by a full percentage point.

He reiterated his belief that the Fed should “frontload” rate increases in order to stay ahead. inflation running at a 7.5% paceThe past year.

Fed officials have resisted tightening their policy. They maintained that for most of the last year, the current run was due to pandemic-specific factors like clogged supply chain and outsized demand. This would eventually fade.

Bullard claimed that overall, there was too much focus and too many mindshare on the belief that inflation would eventually go away. There is a risk that inflation will not subside. 2022 will mark the second consecutive year with very high inflation. Given this, we believe the Fed must act faster and more aggressively in order to combat inflation than it would under other circumstances.

Fed indicated that it is likely to start raising interest rates in MarchThis would mark the third increase in three years. The markets expect another five to six rises in increments of 25 basis points. The basis point equals 0.01 percentage points.

Bullard stated that the forthcoming change in policy should not be seen as an effort to limit the market and economy.

It is not strict policy. He said, “Don’t believe anyone telling you that it’s strict policy.” “It will be the removal or accommodation of this that signals that we have taken our responsibility seriously.”

In the wake of Wednesday’s rate rise announcement, market prices have been cooling. the January meeting minutesFed officials showed that they want to be measured in their approach to ending policy aid.

After previously predicting a move of 50 basis points, traders now expect a 25-basis point increase in March. according to CME data. The probability for seven hikesAfter a week of close to 70%, Thursday’s decline was 43%.