The US Federal Reserve Bank of St. Louis President James Bullard said Friday that the central bank does not expect an American recession unless there is a large shock. 

“Recessions would have to come because there’s some really large shocks, but I can’t rule out that there would be some really big shock,” Bullard told the FOX network. “Maybe there would be, but I am not seeing it near-term.”

The Fed raised interest rates by 25 basis points in March and an additional 50 basis points May 4 to lower record inflation. Fed President Jerome Powell also signaled that more 50 basis points rate hikes are on the table in coming meetings.

With the Fed’s hawkish stance and aggressive monetary tightening, the US stock market has been on a decline for the past two weeks.

The Fed is aiming to tame the record inflation, now at 8.5%, but higher interest rates mean less liquidity for the markets, pushing stock exchanges lower.

“I think you would expect with the Fed raising rates that all these assets, trillions of dollars worldwide, would have to be repriced, but we have to get inflation under control and I think we have a good plan to do so,” said Bullard.

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