Everything's Fine, We're Fine Here, How Are You?

St. Louis Fed chief James Bullard wants you to know everything's fine, Europe is fine, the debt crisis is fine, the banks are fine, and the economy is doing great!

The U.S. recovery is likely to continue and private-sector job creation will start to pick up in the summer, causing the jobless rate to gradually fall this year, Bullard said.

Some economists may have an overly pessimistic view of the U.S. labour market as they are excluding the number of temporary jobs created, he said.

U.S. consumer prices unexpectedly fell in April for the first time in a year, with the core annual rate recording its smallest gain since 1966, data showed last month.

Core consumer price data could be distorted by a weak housing market and if this factor is excluded the data would show prices of other goods are rising, Bullard said.

Bullard was among three Fed officials who sought an increase in the Fed's discount rate in April. The  discount rate, currently at 0.75 percent, is the rate the Fed charges commercial banks for loans.

Sure, let's just ignore the housing market, call it the Specter of Inflation, and raise interest rates as Europe's financial problems are putting a credit squeeze on all of us. Gotta stop that inflation, folks!  You know, the inflation that doesn't exist.  But it might, so we have to cut spending!  That will stimulate growth and the Invisible Hand Of The Free Market will make more jobs, or something.

We'll be fine!