“This is the most predicted selloff of all time because the markets have been up so much and they have had so many days in a row without meaningful down days,’’ Bullard told reporters after a speech Tuesday in Lexington, Kentucky. “So it is probably not surprising that something that has gone up 40 percent like the S&P tech sector would at some point have a selloff. Before there was a selloff, people said repeatedly some day this will sell off.”
Bullard said he agreed with former Chair Janet Yellen’s analysis that stock prices were elevated.
“They look high compared to historical norms, things like prices to trailing earnings,’’ he said.
While the central bank is sometimes seen as stepping in to protect investors from steep market declines with a “Greenspan put’’ or a “Bernanke put’’ named after former chairs, Bullard said the Fed isn’t focused on helping markets so much as it reacts to the same data.
“The stock market and the Fed are looking at the same thing, which is the future of the U.S. economy and the future of the global economy,’’ he said. “To the extent the markets see something that is different from what the Fed sees, it is important information. It is not so clear to me here that there is a story like that -- that the U.S. economy is not as robust as we thought it was.’’