St. Louis Fed President James Bullard told Reuters that current inflation, which is well over Fed’s target, is at levels which former chairs like Alan Greenspan would have “immediately tried to quash.” He called for swift action on ending the asset purchase program. “We are not being that preemptive. Our models say this will settle down, but in the meantime it will be pretty volatile,” he said, “what I want to be prepared for and get the committee prepared for is the risk that this is an unpredictable situation.”

Bullard also said a new “regime” may have arrived and “monetary policy needs to be more nimble.” The global equilibrium was upset by the pandemic, and “the reverberations will continue, and you will have a lot more volatility than you are used to.”

“We will have long, lingering effects as the rest of the world recovers. You have shortages and bottlenecks everywhere. You have Europe likely to grow more quickly in coming quarters,” Bullard said. “You have industries still adjusting to the post-pandemic world – many things happening, and at a pace we are not used to.”

In an interview with CNBC, Atlanta Fed President Raphael Bostic emphasized the importance of combating inflation, which he deems as “job No. 1”. He expressed his readiness to bear the cost necessary to achieve the Fed’s target, underscoring the need for a more aggressive stance on rate hikes given the current economic scenario.

Bostic stated, “What we’ve seen is that inflation has been persistently high, consumers have been really resilient in terms of their spending, and labor markets remain extremely tight. All of those suggests that there’s still going to be upward pressure on prices.” His comments highlight the ongoing pressures that may trigger further inflationary spikes.

He showcased leaning towards a proactive approach in dealing with inflation, stating, “If there’s going to be a bias to action, for me it would be a bias to increase a little further as opposed to cut.”

Bostic remained confident in Fed’s policy measures, asserting, “There’s still a lot of confidence that our policies are going to be able to get inflation back down to our 2% target.” He made clear Fed’s determination to ensure this target is met, even if it means holding off on rate cuts until well into 2024.

San Francisco Federal Reserve President Mary Daly said yesterday that “patience is where I’m at right now,” regarding monetary policy. She added the US economy is in “a good place”. And interest rates should be left unchanged “until the data suggests we go one way or another way.”

Though, she predicts that unemployment rate at 3.8% will eventually push wages and prices upward. And “it’s just taking a longer time than it typically does”. She noted “that’s part of what feeds into my patient strategy.”

Daly supported Decembers rate hike when the economy was growing at a faster rate. Now, she noted interest rates are at “neutral” and thus, patience is “the way to go, because you don’t want to guess that you need to do more, or guess that we need to do less, you just want to be patient and look at the data.”