St. Louis Federal Reserve President James Bullard said on Thursday that a minimum level for a restrictive Federal Reserve (Fed) policy rate would be 5% to 5.25%, as reported by Reuters.

Additional takeaways

"Once disinflationary process begins it could proceed rapidly as businesses compete to keep market share."

"Recent Retail Sales suggests household spending cushion remains, a slowdown for the coming Christmas shopping season would be fine."

"October inflation data was encouraging but could easily go the other way next time, inflation is still bad."

"Any signs of disinflation so far are tentative at best but hope 2023 will be the year when it happens."

"Not seeing much cooling in the labor market."

"Fed will want to err on the side of keeping rates higher for longer to avoid mistakes of the 1970s."

"Housing is showing impact of monetary policy, but also boomed unexpectedly during the pandemic."

Market reaction

The US Dollar Index edged slightly lower in the last hour but it was still up 0.6% at 106.90 at the time of press.