Atlanta Fed President Raphael Bostic said yesterday, “it’s time that we get off of our emergency stance — I think it’s really appropriate that we move our policy closer to a neutral position — but I think we need to do it in a measured way.”

At the same virtual conference, Chicago Fed President Charles Evans said, “I’m optimistic that we can get to neutral, look around, and find that we’re not necessarily that far from where we need to go.”

St. Louis Fed president James Bullard said in a presentation, “standard Taylor-type monetary policy rules, even if based on a minimum interpretation of the persistent component of inflation, still recommend substantial increases in the policy rate.” Also, “credible forward guidance means market interest rates have increased substantially in advance of tangible Fed action. Both are indications that Fed is “behind the curve”.

The recommended policy rate from Bullard’s simple Taylor-type policy rule calculation is 3.5%, while the current value of the policy rate is 37.5 basis points. “One concludes that the current policy rate is too low by about 300 basis points, according to this calculation,” Bullard said.

Full release here.

In the minutes of the March 15-16 FOMC meeting, many participants said they would have preferred a 50bps hike because inflation was well above target, and risks were to the upside. However, a number of them pointed out the “greater near-term uncertainty” associated with the Russia invasion of Ukraine. Thus, a 25bps hike was taken at that meeting.

However, “many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified.

Meanwhile “all participants” agreed that balance sheet runoff should start “at a coming meeting”. ” Participants generally agreed that monthly caps of about $60 billion for Treasury securities and about $35 billion for agency MBS would likely be appropriate. Participants also generally agreed that the caps could be phased in over a period of three months or modestly longer if market conditions warrant.

Full minutes here.

Philadelphia Fed President Patrick Harker “inflation is running far too high, and I am acutely concerned about this… “The bottom line is that generous fiscal policies, supply chain disruptions, and accommodative monetary policy have pushed inflation far higher…. I’m also worried that inflation expectations could become unmoored.”

He said he expects “a series of deliberate, methodical hikes as the year continues and the data evolve.”