Today has certainly been entertaining.

First, Janet Yellen came out with a chart showing there was a 70% chance that rates would be between 0% and 4.5% in 2018. Is the 90% confidence level -1.0 to 6?

This was followed up by a blast from St. Louis Fed president and FOMC voting member James Bullard that the Fed’s Forecast of Gradual Rate Hikes is Damaging its Credibility and the Economy.

The Federal Reserve’s forecast of gradual rate hikes is damaging the economy and the central bank’s credibility, said St. Louis Fed President James Bullard on Friday.

In an interview on CNBC, Bullard stuck to his forecast of one rate hike over the next two-and-a-half years.

Bullard, who is a voting member on the Fed’s policy committee this year, said he was “agnostic” about exactly when the Fed should take that one step but did not seem eager to move at the September meeting.

Bullard said he thought it would be best to raise interest rates after there had been some “good news about the economy.” While there has been two good jobs reports, “year-over-year GDP growth rate is very low,” he noted.

The St. Louis Fed head said he was trying to “break down” the Fed’s “on-the-cusp-of-200-basis- points story” for interest rates over the same forecast horizon.

Asked if he believed the Fed’s forecast was damaging the economy, Bullard replied, yes.

“I think that it is hurting our credibility. By the end of this year, we’ll be two years into the process since [quantitative easing] ended, maybe have moved twice at this point. So I think that is affecting global pricing. You’ve got this policy divergence story that has been in FX markets for a long time here,” he said.

“We want to line that up better with a more realistic assessment of what is going to happen over the forecast horizon,” he said.

Realism From Yellen

Isn’t that “realistic”?

Perhaps not. What are the odds rates go negative in the next downturn?