By Ann Saphir
(Reuters) - St. Louis Federal Reserve Bank President James Bullard on Friday said he would be "okay" with a second rate hike this year, but reiterated his view that the Fed would not need much more to keep inflation in check.
"One hike here or there is not the issue," Bullard said in Memphis. Bullard said he thought just one rate hike this year would be appropriate, but suggested he would not fight a second one. The Fed raised rates earlier this month, and most Fed officials expect to do so twice more this year.
President Donald Trump has said he wants tax cuts and plans to slim the federal rule books, and some Fed officials have said they may support faster rate hikes if the programs boost growth or inflation.
But Bullard argued Friday the Fed has time to wait and see if fiscal policies give a boost to productivity growth, and thus to overall economic growth, adding that revenue-neutral tax reform and deregulation were among policies that could have a positive impact.
Bullard also gave a shout out to policies that may not be at the top of Trump’s agenda, including “smart” immigration reform that boosts the number of younger workers available to support the growing number of older Americans getting government entitlements like social security and Medicare.
Trump has focused on deporting illegal immigrants and bringing more Americans into the workforce, and has not suggested he would encourage an influx of young foreign workers.
Beyond immigration, Bullard said automation of work, including driverless cars, is "always" good for the economy because it boosts productivity.
"I’m here to tell you, don’t fear the robots.”
