By the way, James Bullard pretends to be more of an idiot than he is. He KNOWS better than to tighten policy when velocity is NOT rising. He KNOWS that:
AND – He KNOWS that tightening policy when velocity is NOT rising takes a huge bite out of not only P, but ALSO Y in random fashion for as long as the half-baked policy continues and may even become out of control (think 2008).
Perhaps Bullard believes that all we really want is nominal prices to go down and that we don’t care if income goes down. BUT he doesn’t tell ANYONE while politicking in “Whip Inflation NOW” that taking care of supply side inflation with demand policy hits BOTH prices AND income because you don’t get to have your cake and eat it too in the nominal world. Sorry, friends, it just doesn’t happen. ALL prices go down, not just the ones on the debit side of the ledger – and, of course, the exception to this rule is any nominal contract, like a mortgage (less income + same mortgage = OUCH).
DO NOT BUY what James Bullard is selling. It makes NOTHING more affordable. NOTHING.