“International headwinds affecting the U.S. economy have been widely discussed in global financial markets during the last several years,” he said. “Recent negative international influences on the U.S. economy appear to be waning.”
He looked at two factors that have been widely cited in the international headwinds discussion: global financial stress and the negative impact of a stronger dollar on U.S. gross domestic product (GDP) growth.
“Measures of U.S. financial stress indicate that stress has fallen off its peak earlier this year,” he said. Regarding the second headwind, Bullard noted that the dollar appreciated mostly during the second half of 2014, coinciding with the run-up to the European Central Bank’s quantitative easing program. “This appeared to have had a substantial effect on the net exports contribution to U.S. GDP growth during the winter of 2014-2015,” he said. “Since then, however, the effects of a stronger dollar appear to be waning.”