Former Richmond Fed President Jeffrey Lacker said in an interview with INM on Monday: “I feel like they need to get to 5% before we can really think they’re on point. dead”.

Additional quotes

“Even at the current aggressive pace of 50 basis points per meeting, ‘they won’t hit that until the middle of next year.’

“Fed officials have said they would like to push official rates, currently in a range of 0.75% to 1%, to more neutral levels ‘quickly.’

“But policymakers have defined neutral in nominal terms assuming the inflation rate will eventually return to the Fed’s 2% target. That’s an important assumption.”

“Three percent is fine as a neutral rate if inflation is already 2%. But if not, then 3% is not neutral. What is neutral depends on the current inflation rate, the prevailing rate , of what it should be in the next two quarters.”

“At the September meeting, the data was very clear that they needed to move. But they were paralyzed by their forecast and this commitment to reduce asset purchases. That’s what held them back until March. “

“I think they are six months behind the curve. They are catching up with speed and haste. markets, wage rates have accelerated over the winter and companies have become accustomed to evaluating cost increases, passing them on to price increases.”

“I am somewhat pessimistic about their ability to bring down inflation without causing a recession. It seems to me highly unlikely that they will be able to do so.”

“Signs of inflation coming off its peak are extremely tentative, nothing to bring to the bank. They seem highly unlikely to reduce inflation.”