By Michael S. Derby 

St. Louis Fed President James Bullard said Thursday that a modernized way of looking at a venerable monetary-policy rule supports his belief that no rate rises are needed right now.

Mr. Bullard said the Taylor Rule, which suggests a level for Fed short-term rates based on how the economy is performing, can be updated in a way that takes greater account of inflation-expectations data and the fact that the labor market has a lessened impact on price pressures.

"Incorporating these developments" creates a new Taylor Rule "that suggests maintaining the current level of the policy rate would be an appropriate policy over the forecast horizon," Mr. Bullard said in material for a presentation in Memphis, Tenn.

Mr. Bullard, who isn't currently a voting member of the interest-rate-setting Federal Open Market Committee, has long favored delaying Fed rate rises. In late September, the Fed boosted its overnight target rate for a third time this year. It is expected to act again in December and press forward with more increases in 2019. Most on the FOMC think rate rises are needed to keep the economy from overheating.

Write to Michael S. Derby at michael.derby@wsj.com<mailto:michael.derby@wsj.com>

(END) Dow Jones Newswires

October 18, 2018 09:19 ET (13:19 GMT)