The spike in oil prices after the surprise OPEC+ production cut may make the Federal Reserve’s inflation-fighting job “a little more difficult,” but it is too soon to know for sure, said St Louis Fed President James Bullard, on Monday. “This was a surprise – this OPEC decision – but whether it will have a lasting impact, I think, is an open question,” Bullard said, in an interview on Bloomberg Television. “Oil prices fluctuate around – it is hard to track exactly. Some of that might feed into inflation and make our job a little more difficult,” he added. Bullard said he had already expected higher oil prices due to the recent upgrades to the economic outlook for both China and Europe. The St. Louis Fed president thinks the Fed should raise rates to a range of 5.5%-5.75%. That’s higher than the median Fed forecast of 5%-5.25%. “I think inflation will be stickier,” he said, noting that the Dallas trimmed mean price index, which excludes each month’s volatile components of inflation, was 4.6% in February, unchanged from the prior month.
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