The US Federal Reserve's (Fed) monetary policy is not yet in a range estimated to be sufficiently restrictive to reduce inflation,  St. Louis Federal Reserve President James Bullard said on Thursday, as reported by Reuters.

Additional takeaways

"Fed rate hikes to date have had only limited effect on observed inflation."

Even dovish assumptions about the state of monetary policy warrant further rate increases."

"Monetary rule would set lower bound on restrictive policy of around 5%, versus current Fed target rate range of 3.75% to 4%."

"Range of restrictive policy estimates could be lower if inflation falls, markets expect disinflation in 2023."

"Caution warranted given markets, Fed, have been expecting inflation to fall for more than a year."

Market reaction

The US Dollar Index continues to push higher heading into the American session and was last seen gaining 0.8% on the day at 107.12.