Federal Reserve Chairman candidate Brad: Does not support a 50 basis point rate cut this week.

James Bullard, former president of the St. Louis Federal Reserve and a candidate for the next chair of the Federal Reserve, said he would not support a 50 basis point rate cut this week. Bullard said in an interview on Friday, "I think the Fed's decision was right." When asked if he would vote in favor of a 50 basis point cut, he replied, "No, I do not think so." He also stated, "It looks like the Fed will continue to cut rates three times before the end of the year." The Fed lowered its benchmark interest rate by 25 basis points this week, which Jerome Powell, the Fed chairman, described as a "risk management" move to bolster the increasingly fragile labor market. The decision received nearly unanimous support, with the only dissent coming from Trump ally Stephen Moore, who officially joined the Fed board this week and supported a 50 basis point rate cut. Bullard said that a total of 75 basis points in rate cuts by the end of the year would be a "big move," but the Fed still has "optionality" going into next year. He estimated that the so-called neutral interest rate, which neither stimulates nor restrains the economy, is around 3.25%. For doves, he said that a 25 basis point rate cut this week and another 25 basis point cut in October is "almost as good as a 50 basis point cut this week." Earlier this month, Bullard said that he had discussed the possibility of becoming Fed chairman with U.S. Treasury Secretary Steven Mnuchin. Mnuchin said this week that it was a "very good" meeting. Bullard said on Friday that he knows almost all of the candidates and they are all "excellent." The former Fed official, who is currently the dean of the Purdue University Krannert School of Management, also said that the Fed's massive purchases of mortgage-backed securities in the spring of 2020 may have been a mistake. Ultimately, the U.S. real estate market recovered after the initial shock of the COVID-19 pandemic, making such support unnecessary. He also added that it will take a long time to remove these securities from the Fed's balance sheet.