Minneapolis Fed President Neel Kashkari said yesterday that it’s “appropriate” to start normalizing policy. However, he cautioned “let’s not overdo it”. “If we raise rates really aggressively, we run the risk of slamming the brakes on the economy, putting the economy into recession, which would then — we’d be crashing back down into this low inflation environment,” he warned.

Kashkari also revealed that he and his family had COVID earlier this year, and “a lot of families are experiencing what we just experienced.” He added “this will be a while” before people can be comfortably living with the coronavirus.

St. Louis Federal Reserve president James Bullard repeated his call for tapering to end asset purchase by the early next year, as “we don’t need the asset purchases at this point.”

“I think a lot depends on whether inflation going to moderate in 2022 or not. I’m a little skeptical that it is. I think we’re going to get at least 2.5% inflation in 2022, maybe higher than that and there’s some risk to the upside on that,” Bullard said.

“We will be able to get to a good consensus on the committee and get to a good wind-down process. It does seem that we are coalescing around a plan,” Bullard said

Richmond Fed President Thomas Barkin said, “we’re committed to returning inflation to our 2% target and we’ll do what it takes to get there. I’d expect inflation to bounce around on the way back to our target.” He didn’t expect inflation to “come down immediately”.

“A recession is obviously a risk in the process,” Barkin said. But, “it doesn’t have to be like a 2008 recession, it doesn’t have to be calamitous. We’re out of balance today…returning to normal might actually mean products on shelves, cars on lots and restaurants fully staffed.”