Fed Ready to Go? Where They Stand

By: C.Jay Engel

Talk of the Fed’s upcoming FOMC meeting, which takes place March 14–15, has largely been centered around the prospects of a rate hike — with a plethora of Fed members coming out with a hard “hawkish” push. Here is a round up of their recent comments.

Fed Chair Janet Yellen:

We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect.

New York Fed President William Dudley:

So, put it all together, I think the case for monetary policy tightening has become a lot more compelling … sooner rather than later.

Fed Governor Lael Brainard:

Assuming continued progress, it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path.

Dallas Fed President Robert Kaplan:

We want to guard against a situation where we get behind the curve on inflation.

Fed Vice Chairman Stanley Fischer:

If there has been a conscious effort [to hike in March] I’m about to join it. … I think the advice that has been given by a large number of members of the Fed, of the [FOMC], is correct, and I strongly support it.

Philadelphia Fed President Patrick Harker:

Seeing any data that is not consistent with what I see as continued growth in the economy. We’ll see. But I don’t think March should be taken off the table at this point.

Fed Governor Jerome Powell:

The case for a rate increase in March has come together.

Cleveland Fed President Loretta Mester:

I’d be comfortable, if the economy continues on, for interest rates to be higher than they are now.

Richmond Fed President Jeffrey Lacker. (Referring to the idea that the Fed should hike to avoid inflationary pressures):

 Monetary policy in the 1960s makes for a sobering tale, but I believe we can avoid repeating those mistakes.

San Francisco Fed President John Williams:

In my view, a rate increase is very much on the table for serious consideration at our March meeting. We need to gradually ease our foot off the gas in order to avoid a ‘too hot’ economy that in the end isn’t sustainable.

St. Louis Fed President James Bullard was the only major dissenter of the above hawkishness:

I wouldn’t see any reason to be especially aggressive about interest-rate hikes in this environment.

What actually ends up happening remains to be seen. Next week is the final week before the March meeting. Anything can happen and we will be sure to report on any changes in the narrative.