The FT has a good article discussing the views of James Bullard and Christopher Waller on Fed policy:
In a statement released on Friday, Bullard, a voting member of the policy-setting Federal Open Market Committee, said a half-point rate rise — a tool that has not been used since 2000 — would have been “more appropriate” than the Fed’s quarter-point increase, given the strength of the labour market and broader economy, as well as the “excessive” level of inflation. . . .
Bullard noted on Friday that US monetary policy had been “unwittingly easing”, as rising price pressures have pushed short-term “real” or inflation-adjusted rates lower and kept them well into negative territory. At these levels, rates remain highly stimulative, spurring borrowing and the very demand the Fed is seeking to dampen.
Biden should have picked Bullard to chair the Fed.
Waller also has some interesting observations:
Christopher Waller, a Fed governor, said in an interview with CNBC on Friday that though data were “screaming” for a half-point move this week, geopolitical tensions justified proceeding with “caution”.
However, he backed a “front-loading” of interest rate increases this year, which he said implied half-point rate rises “at one or multiple meetings in the near future”.
How high does the Fed need to raise rates to control inflation? It depends on what sort of monetary policy they adopt.
“But wait, aren’t interest rates . . . like, monetary policy?
No. Actually, they aren’t.
The Fed would not have to raise interest rates as high with a tighter monetary policy as it would with a looser monetary policy. When it abandoned FAIT, the Fed made monetary policy much looser, hence they’ll have to raise rates higher than if they had stuck with FAIT. As a result, there is more likelihood that the yield curve will invert.