Fed's Bullard: Risk of US economy entering recession has diminished in recent weeks

St. Louis Fed President James Bullard said the risk of the US economy entering a recession has diminished in recent weeks and that he believes inflation will decline in 2023. St. Louis Fed President James Bullard said, "The Federal Open Market Committee took aggressive steps in 2022, and interest rate hikes are planned to continue in 2023. This has returned inflation expectations to a level consistent with the Fed's 2% inflation target." Bullard also added, "As the real economy normalizes in 2023, realized inflation will likely follow inflation expectations to a lower level." Bullard, who also said he is increasingly optimistic that the Fed can achieve its goal of reducing inflation without sending the economy into recession, said: "The likelihood of a soft landing in the US economy has increased compared to the fall of 2022. The reason I think the outlook for a soft landing in the economy has improved is because the labor market has not weakened as much as many expected. The labor market could continue to be quite volatile in 2023." Bullard is not a voting member of the FOMC this year.