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James Bullard: latest market views
Purdue University
Summary
James 'Jim' Bullard is the inaugural dean of Purdue University's Mitch Daniels School of Business and was president and CEO of the Federal Reserve Bank of St. Louis from 2008 to 2023.
Chorus has 7 views from James Bullard across 2 episodes on Bloomberg Surveillance since October 14, 2026.
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Newest first. Every quote is checked against the episode's transcript.
The AI boom shows red flags on revenue, build-out pace and borrowing, and markets are starting to crack.
Bullard thinks the Fed would welcome some tempering of the AI boom. He lists several red flags: where the revenue will come from, how fast the build-out will proceed, and how much borrowing is going on. He says markets are starting to crack a little and are trying to calibrate where the boom goes next. He implies the Fed prefers smoother, less frenzied markets.
“I think there are many red flags that have been waving here about this, you know, where's the revenue going to come from, how fast this build out going to occur, what about all this borrowing going on... it is starting to crack a little bit”at 20:31
Bloomberg Surveillance: Bloomberg Surveillance TV: October 29th, 2026 ·
The committee is on a quarterly pace; he favours two hikes, then a review.
Bullard believes the committee's decision was effectively made at the September meeting and that the committee implicitly had a quarterly pace in mind. Williams's view, which he thinks is popular, is that the Fed can wait until December and the next projections, then decide on 2027. Asked about his earlier call for two hikes, he refines it to two hikes and review, a view that implies two more increases before reassessing.
“I think maybe a little better wording would be two hikes and review.”at 21:33
Bloomberg Surveillance: Bloomberg Surveillance TV: October 29th, 2026 ·
Warsh's communication leans toward markets over committee, closer to Greenspan's style.
Bullard says Warsh harks back to Greenspan, which he appreciates, but that Warsh is trying to put more weight on markets and less on the committee. He thinks it is good for the market to understand where the committee stands, because that yields more accurate pricing. He also says the Fed should give markets a clear sense of its reaction function, and that the transparency shift began under Bernanke and cannot be reversed.
“He harkens back a little bit to Greenspan, which I can appreciate because I like Alan Greenspan, but a little bit more market and a little bit less committee, I think, is basically what he's trying to do.”at 23:05
Bloomberg Surveillance: Bloomberg Surveillance TV: October 29th, 2026 ·
Fed's center expects one more hike by year-end, then a flat 2027; market reaction was overdone.
The September dot plot shows a raise in September and one more by year-end, and it has the most forward guidance because it covers only the next two meetings. Speakers such as Waller and Williams are signaling the same. The committee's center wants to wait and see for 2027, which is why it has a flat outlook for that year. Rates are already up a lot, including longer-term rates, which helps the committee. Policy has changed sharply from earlier this year, when the market expected cuts. The committee feels comfortable waiting because it still believes much of the inflation will dissipate in the first half of 2027. Bullard thinks the market's reaction to a possible series of aggressive hikes was overdone.
“the dot plot came out with, okay, we'll raise in September and we'll do one more by the end of the year... I think that's where the center of the committee is, and I think they want to wait and see for 2027, and so they've got a flat outlook for 2027.”at 19:03
Bloomberg Surveillance: Bloomberg Surveillance TV: October 14th, 2026 ·
Fed can cut inflation aggressively without damaging the economy, as 2022–23 showed.
The Fed is committed to its 2% target, but there is a question about how much inertia there is in inflation and how much action is needed. Bullard points to the 2022 and 2023 experience: acting aggressively and with purpose cut a lot of inflation without damaging the economy. He hopes the Fed can get that again, though it does not need to cause a recession every time, as long as it is aggressive enough to bring inflation back to target.
“the lesson from 2022 and 2023 is that if you act, aggressively and with purpose, you can get a lot of reduction in inflation without damaging the economy, and and so, you know, hopefully they can get that again here.”at 23:01
Bloomberg Surveillance: Bloomberg Surveillance TV: October 14th, 2026 ·
AI is a bubble that will burst; capex exceeds past buildouts with little revenue justifying it.
Bullard says there is not really a product or revenue stream on the table to justify the physical investment, except the hope that AI will bring radical change. Much more physical investment is planned, and the buildout is bigger than any capital buildout the US has seen, including railroads and canals. He describes it as a feeding frenzy that will come to an end, though the timing is uncertain and the air could come out slowly. He also notes open-weight models sitting on the sidelines, the fact that about 80% of answers come from 20% of the computation, and chips depreciating once stuffed into physical capital. He compares it to the internet boom, when rates were high toward the end and people said it had no effect until it did.
“I think it's a bubble. I think it will burst at some point. Sometimes the air can come out slowly, so we'll see if that's what happens. But you shouldn't kid yourself. This is a feeding frenzy, and this is bigger than any capital build out that The US has ever seen, ever.”at 24:10
Bloomberg Surveillance: Bloomberg Surveillance TV: October 14th, 2026 ·
AI will be a great technology that diffuses through the economy and lifts productivity, even as a bubble.
Bullard expects AI to be a good bubble in the end and a great technology. He believes it will diffuse all the way through the economy and improve productivity. He ties this to the internet boom, which he also considers a good bubble, even though it was accompanied by high rates and a sharp reckoning at the end.
“I think AI will be a good bubble in the end, a great technology, it will diffuse all the way through the economy, it will improve productivity, all of that will happen,”at 25:59
Bloomberg Surveillance: Bloomberg Surveillance TV: October 14th, 2026 ·
Shows
- Bloomberg Surveillance · 2 episodes
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