A few FOMC participants have already restarted the conversation about monetary policy following the March meeting. President Kashkari explained his dissent at the March meeting: “The data are basically moving sideways, so I’m asking, what’s the rush to raise rates?” He seems to be one of the few remaining members of the “patient” camp. Others who had been in that camp, notably Yellen, Dudley, and Brainard, have more recently acknowledged improvement in the economic outlook, particularly a reduction in downside risks. President Harker, whom we’ve generally seen as at least somewhat to the hawkish side of the center of the FOMC, revealed that he is on board with a modest overshoot of the inflation objective: “We are moving in the right direction. There will be a little bit of an overshoot and that’s ok. It’s appropriate.” President Evans made the same point: “There is room to get inflation up to 2 percent and in fact going beyond 2 percent a little bit to make sure we get there, and that it’s a symmetric inflation objective, so that’s ok.” He suggested that his March dots may imply three hikes in 2017: “As I gain more confidence in the outlook I could support three total this year. If inflation began to pick up, that would certainly solidify [his support for three hikes in 2017]. It could be three, it could be two, it could be four if things really pick up.”
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