A speech from [St. Louis Fed President Bullard]( * The situation in late 2018: The story begins late last year, when the interest rate outlook was considerably different than it is today. As of Nov. 8, the two-year Treasury, often taken as a harbinger of future FOMC policy, was trading to yield 2.98%. • Starting with Chair Powell’s comments at the AEA meetings in Atlanta on Jan. 4, the FOMC began to change direction. During the first half of 2019, the FOMC began to project fewer increases in the policy rate and also laid out a plan to cease the runoff of the Fed’s balance sheet. * On June 19, the two-year Treasury was trading to yield 1.74%, a decline of 124 basis points from the level on Nov. 8, 2018. As of last Friday, Aug. 2, the two-year Treasury was trading to yield 1.72%, and the 10-year Treasury was trading to yield 1.86%. One straightforward reading of these events is that the outlook for shorter-term interest rates influenced by the FOMC, as embodied in the two-year yield, dropped because of FOMC actions by about 126 basis points during the last nine months. This is a very large change over this time frame. Furthermore, these policy actions fed through to longer-term yields, which are more important for investment decisions. The bottom line is that U.S. monetary policy is considerably more accommodative today than it was as of late last year. * Growth for 2019 as a whole has long been expected to be slower as the economy returns to its potential growth rate. A key risk has been that global trade uncertainties may cause this slowing to be sharper than anticipated. The direct effects of trade restrictions on the U.S. economy are relatively small, but the effects through global financial markets may be larger. * U.S. monetary policy cannot reasonably react to the day-to-day give-and-take of trade negotiations. I think of trade regime uncertainty as simply being high in the current environment and as something that is already being judgmentally factored into my monetary policy calculus. Particular threats or counterthreats are only manifestations of already high trade regime uncertainty. I do not expect this uncertainty to dissipate in the quarters and years ahead.