San Francisco Fed President Mary Daly said, “if we didn’t have higher inflation readings, you might let the economy go a little bit more to see if we can get through COVID and have those individuals come back.”

However, “right now, we’re dealing with inflation that’s above our target and inconsistent in its current readings with our longer run views on price stability,” she added. “We have to deal with that.”

Fed might need to start dialing down some of the extra policy accommodation and “start crafting a plan to, at least, you know, think about raising the interest rate,” she said.

Atlanta Fed President Raphael Bostic said yesterday that with robust growth, an improving job market and inflation more than twice Fed target, having tapering finished “some time before the end of the first quarter” would be “in our interest”.

Bostic also referred to OECD’s projection that inflation in the US could be above 4% for the year of 2022. He said, “if it is at that kind of level, I think there is going to be a good case to be made that we should be pulling forward more interest-rate increases and perhaps do even more than the one I have penciled in.”

Cleveland Fed President Loretta Mester told Bloomberg TV, “making the taper faster is definitely buying insurance and optionality so that if inflation doesn’t move back down significantly next year we’re in a position to be able hike if we have to.”

She said that recent data “have come in supportive of that case, so I’m very open to considering a faster pace of tapering.”

“Right now, with the inflation data the way it is and with the job market as strong as it is, I do think that we have to be in a position that if we need to raise rates a couple of times next year we’re able to do that,” said Mester.

New York Fed President John Williams said in an FT interview that Omicron “adds a lot of uncertainty to the outlook”. It will “will continue that excess demand in the areas that don’t have capacity, and will stall the recovery in the areas where we actually have the capacity.” That would mean a “somewhat slower rebound overall” and “increase those inflationary pressures, in those areas that are in high demand.”

As for monetary policy, “the question is: Would it make sense to end those purchases somewhat earlier, by maybe a few months, given how strong the economy is?” he said. “That’s a decision, discussion, I expect we’ll have to grapple with.”