In an interview by Nikkei after US CPI release, St. Louis Fed President James Bullard said rate-setters have “framed” the July FOMC meeting as “50 versus 75”. “I think 75 has a lot of virtue to it, because the long run neutral that the committee has, according to the Summary of Economic Projections, is actually about 2.5%,” he said.

“If we made this move at this meeting, that would get us all the way till the long run neutral value. And obviously we’ve got more steps to take in meetings ahead, but we can assess as we go through the rest of this year,” he added.

While Bullard has been advocating to get interest rate to 3.5% this year, rate exceeding 4% by the end of this year is “possible”. “If data came in, continued to come in, in an adverse way, for the committee, then we could consider doing more, as we go through the fall here. So, I’d say it’s a possibility.”

Full interview here.

Fed Governor Christopher Waller said in a speech that as the base case, he supports another 75bps rate hike at the July 26-27 FOMC meeting. This level is “close to neutral”, neither stimulates nor restricts demand.

But Waller added, if upcoming retail sales and housing data “come in materially stronger than expected it would make me lean towards a larger hike at the July meeting to the extent it shows demand is not slowing down fast enough to get inflation down.”

After July, Waller expects “monetary policy to be restrictive until there has been a sustained reduction in core personal consumption expenditure (PCE) inflation, which excludes food and energy.” And, “until I see a significant moderation in core prices, I support further rate hikes,” he added.

Full speech here.

Cleveland President Loretta Mester told Bloomberg TV yesterday, the June inflation report was “uniformly bad”. “There was no good news in that report at all,” she said. “We at the Fed have to be very deliberate and intentional about continuing on this path of raising our interest rate until we get and see convincing evidence that inflation has turned a corner.”

“Certainly the inflation report suggests that there’s no reason to say that a smaller rate increase than we did last time, right, because nothing moved in that direction,” she added.

Asked if a 100bps hike is appropriate this month, Mester said, “We’re going to have the meeting and we’re going to talk about what the appropriate path of policy is. We don’t have to make a decision today.”

Commenting on yesterday’s US CPI report, which showed headline inflation surged to 9.1%, Atlanta Fed President Raphael Bostic said the “numbers suggest the trajectory is not moving in a positive way”. But, “how much I need to adapt is really the next question,” as he needed to study the “nuts and bolts” of the report.

“The top-line number is a source of concern,” Bostic said, “Everything is in play.” Asked if that included by raising rates by a full percentage point, following BoC’s surprised move, he replied, “it would mean everything.”

Richmond Fed President Thomas Barkin said yesterday, “I definitely see signs of softening” in the economy, with evidence “most pronounced in lower income households”.

“I expect inflation to come down but not immediately, not suddenly, and not predictably,” he said. “My expectations are it will be a slower path rather than an immediate path down to 2%.”

Barkin also said he’s open to a 50bps or 75bps hike in July. “I am one of the guys who like the option value of deciding the week of the meeting as opposed to two weeks before the meeting. But I thought Jay’s (Fed Chair Jerome Powell) guidance the last time was very sound,” he added.