Presidents Lacker and Bullard spoke following the December FOMC meeting and Yellen’s press conference. On the three hikes implied by the median 2017 dot, Lacker’s view was “we are going to need more than that.” He sounded a note of caution regarding the uncertainty surrounding new fiscal policy proposals, but generally expressed optimism: “I am heartened they have placed more weight on aspects that will benefit growth and less weight on aspects like trade barriers that could reduce growth.”
Bullard, in a wide-ranging interview, noted that “the contours of our outlook for the U.S. economy arethe same” as previously. He saw the additional hike implied bythe 2017 median dot as justified by thechanging balance of risks: “There is some upside risk because the new administration wants faster growth and it is possible some of the things they are talking about will drive productivity higher.” However, he pointed out that “we don’t think that would be likely to occur in 2017. It would probably be 2018 or 2019. That will give us time as monetary policymakers to assess what is being done and make a judgment as we go forward.”
In a broader discussion of the future conduct of monetary policy, Kashkari argued in an Op-Ed that proposals to constrain the Fed’s decision making by imposing requirements to follow rules, such as the Taylor Rule, could potentially be “very damaging.” Instead, he preferred greater reliance on non-monetary policy actions, such as fiscal policy, to provide the appropriate environment for economic growth.