St. Louis Fed President James Bullard said yesterday, “we want to get to neutral expeditiously, I guess is the word of the day. I’ve even said we want to get above neutral as early as the third quarter and try to put further downward pressure on inflation at that point.”

As for the May FOMC meeting, “more than 50 basis points is not my base case at this point,” he said. “I wouldn’t rule it out, but it is not my base case here.”

Bullard also reiterated that he would like to see interest rate at 3.50% by the end of the year. “You can’t do it all at once, but I think it behooves us to get to that level by the end of the year,” he said.

New York Fed President John Williams told Bloomberg TV that a 50bps rate hike in May is a “reasonable option” because the “federal funds rate is very low”. He added, “we do need to move policy back to more neutral levels.”

“We need to really focus on bringing inflation down to our 2% longer-run goal, and to do that over the next few years. So, that is the number-one focus, and I say that because the economy is strong,” Williams said. “So I do think from a monetary policy point of view, it does make sense for us to move expeditiously towards more-normal levels of the federal funds rate.”

“I think the economy can withstand real interest rates at neutral or a bit above,” he said. “We’ve seen a dramatic, significant movement in yields and financial conditions over the past several months and that’s already positioning policy well to get supply and demand back into balance.”

Federal Reserve Governor Christopher Waller said in a CNBC interview that preferred a “front-loading approach” on tightening. So, “a 50-basis-point hike in May would be consistent with that, and possibly more in June and July.”

“I think we’re going to deal with inflation. We’ve laid out our plans,” he said. “We’re in a position where the economy’s strong, so this is a good time to do aggressive actions because the economy can take it.”

“I think we want to get above neutral certainly by the latter half of the year, and we need to get closer to neutral as soon as possible,” Waller added.

St Louis Fed President James Bullard said in an FT interview, there’s “a bit of a fantasy” in current policy in centrals banks to think thank inflation could be brought down by moving interest rate to neutral.

“Neutral is not putting downward pressure on inflation. It’s just ceasing to put upward pressure on inflation,” he said. “We have to put downward pressure on the component of inflation that we think is persistent.”

“Getting to neutral isn’t going to be enough it doesn’t look like, because while some of the inflation may moderate naturally . . . there will be a component of it which won’t,” he added.

Bullard also warned that this week’s CPI report just ” underscores the urgency that the Fed is behind the curve and needs to get moving.”

“If markets and households get the idea that the Fed’s not going to do the right thing and not going to keep inflation under control, then you have to gain credibility by actually doing things that show them that you are serious,” he said.