St. Louis Fed’s Bullard links tax bill with equity surge, stronger growth outlook

PHILADELPHIA (Reuters) – The tax legislation approved last year is likely to boost growth and investment and is already pushing up equity prices, but should not force the Federal Reserve to raise rates any faster than expected, St. Louis Fed President James Bullard said on Thursday.

“A lot of good things were done in this tax bill,” said Bullard, who endorsed the alignment of U.S. corporate taxes closer to developed world norms and said he felt that raising the standard deduction will weaken the constituencies behind itemized deductions that can distort economic decisions. “I do hold out the possibility that the tax bill will unleash a lot of investment in the U.S. and you will then get an outsized effect.”

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