St. Louis Fed President James Bullard, speaking on the sidelines of an event in London said that it was disconcerting that the market-based measures of inflation have actually fallen despite the central bank increased interest rates twice this year and four times since December 2015. With regard to interest rates, Mr. Bullard said that the United States is trying to go it alone but questions the reasoning behind it. He said, “"The U.S. is kind of trying to go it alone... which we can do and we certainly have done historically……. But if you want to go it alone in this environment you have to really have data that's coming in strong behind you and justifying what you want to do…… You can go independently - I just think it's hard in this environment with low rates around the world, negative rates in Europe and Japan... how realistic is it for the U.S. to have a (bond) yield curve that is dramatically above our foreign rivals?"

He also added that he is concerned about falling inflation expectations, which is to say that investors are doubting Fed’s ability to generate price growth, "Market-based measures of inflation expectations have come down since March and normally you would think if the Fed was tightening into good data then the inflation expectations would stay constant…….. That's a bit disconcerting for the normalization strategy."

Instead of a rate hike, Mr. Bullard advocated for balance sheet reduction, which he says is likely to begin in September instead of July meeting, which doesn’t have a follow-up press conference.