Fed's Bullard won't commit to second rate cut this year

St. Louis Federal Reserve President James Bullard said during a speech on Tuesday that it is too soon to tell whether a second interest rate cut is warranted, the U.S. central bank must first wait and see how the latest rate easing affects the economy.

"While additional policy action may be desirable, the long and variable lags in the effects of monetary policy suggest that the effects of previous actions are only now beginning to impact macroeconomic outcomes," Bullard said.

His comments come on the heels of the Fed's decision last week to reduce the benchmark federal funds rate by 25 basis points — the first time the central bank lowered borrowing costs since the financial recession. The current range is between 2 percent and 2.25 percent.

Bullard, one of the most dovish Fed members, stressed that the rate cut adjusted for any potential fallout from the U.S.-China trade war, and "now we have to see if we bought enough insurance against it."

As he acknowledged in the slide-by-slide presentation, aptly titled "A  Sea Change in U.S. Monetary Policy", policymakers have considerably changed their outlook for shorter-term interest rates over the last nine months, ultimately voting to provide more accommodation.

"The bottom line is that U.S. monetary policy is considerably more accommodative today than it was as of late last year," Bullard said.

Although a key fear has been that global trade uncertainties could fasten an economic slowdown (and despite a recent escalation in tension between the U.S. and China), Bullard said the overall impact on the economy will be minimal.

"The direct effects of trade restrictions on the U.S. economy are relatively small, but the effects through global financial markets may be larger," he said.