the us economy should continue to grow in the coming several months said st louis fed president james bullard on monday playing down fear of a severe recession that some economists and market pros view as inevitable in the face of the central bank’s war against toohot inflation “on gdp growth i think that the indicators are that there will be continued expansion in the quarters ahead” bullard told students at the barcelona school of economics there are risks but as things stand “right now there will continued expansion through 2022” the policy maker said the us labor market is “as good as you’re ever going to see” it right now he said read odds of us recession are rising bullard warned that the current high inflation remains “far above target” and is very risky for the us economy the main risk is that inflation expectations might become unmoored inflation is already straining central banks credibility he said “we have some work to do” bullard said referring to the fed as it aims to tame price pressures the fed has to follow through with its hawkish guidance to validate market pricing which moved before fed actions “this is a reassuring message because it means we’ve already taken some action and the market pricing is already there and so you’re already getting some downward pressure on inflation” bullard said analysts who warn that the us has to repeat the sharp volckerera recession of the early 1980s to get inflation under control are reading the “wrong lesson” from history the st louis fed president said bullard said the current fed led by chairman jerome powell has more credibility currently than former fed chairman paul volcker who became chairman of the fed board of governors in 1979 until 1987 volcker is credited with conquering one of the us’s worst periods of inflation by encouraging lawmakers to adopt more thrifty policies but also faced challenges quelling price instability until he convinced markets that he was committed to crushing inflation at all costs volcker pushed interest rates to around 20 “modern central banks…have far more credibility than volcker” bullard said “and because of that you might put a higher probability that we can get a soft landing than you otherwise would” he said last week the fed raised its benchmark interest rate by 75 basis points marking the most aggressive interestrate increase in almost 30 years the fed’s target rate is now in a range of 15175 powell said the central bank may follow the large move with a similar increase next month bullard said the fed has “moved a lot’ but said the hikes to interest rates started from a very low level with rates initially around 0 to 025 during the depths of the covid pandemic bullard said he hopes these rate hikes can replicate the experience of 1994 when the fed raised its benchmark federalfunds rate by 3 percentage points in a year bullard said the concentrated rate hikes in 1994 “set up the us economy for the stellar performance in the second half of the 1990s” with strong growth and a healthy labor market “a lot of good things happened in the second half of the 1990s and i hope we can get something like that this time” he said us financial markets were closed monday in observance of juneteenth which officially became a federal holiday last july meanwhile the yield on the 10year treasury note tmubmusd10y has risen 39 basis points so far in june