NEW YORK, June 26 (Reuters) - The Federal Reserve may be behind the curve if the U.S. unemployment rate drops faster than expected, St. Louis Fed President James Bullard said on Thursday, at the same time expressing confidence the Fed will do the right thing.
At the current 6.3 percent rate of unemployment, the United States is “way ahead of schedule” on its trajectory toward a normal labor market, Bullard said in response to questions after a speech on inequality at the Council on Foreign Relations.
Bullard does not have a vote on the Fed’s policy-setting committee this year.
The United States is no longer in a low-inflation environment, he said, adding that inflation will continue to tick higher and rise above 2 percent next year. (Reporting by Gertrude Chavez-Dreyfuss; writing by Ann Saphir; Editing by Chizu Nomiyama)