Fed chair Jerome Powell said yesterday that “now is not the time to be talking about exit” from the asset purchase program. He added, “another lesson of the global financial crisis, is be careful not to exit too early.”

“We’ll let the world know. We’ll communicate very clearly to the public and we’ll do so, by the way, well in advance of active consideration of beginning a gradual taper of asset purchases,” he added. “That wouldn’t be a reason to raise interest rates unless we see troubling inflation or other imbalances that could threaten achievement of our mandate.”

On the outlook, Powell said, “we’ve got to get through this very difficult period this winter with the spread of COVID, but as the vaccines go out and we get COVID under control, there’s a lot of reason to be optimistic.”

St. Louis Fed President James Bullard said in an online WSJ interview, “we’re almost into a zone that we could call restrictive – we’re not quite there yet.”

Fed will wants to make sure that inflation will fall back to 2% target. “We don’t want to waiver on that,” he said.

“Policy has to stay on the tighter side during 2023” as the disinflationary process unfolds, he added.

He still sees rates at 5.25-5.50% range at the end of the year.

Atlanta Fed President Raphael Bostic said Fed should hike by 50bps to 5.00-5.25%, and hold it at that level until well into 2024. “We must determine when inflation is irrevocably moving lower,” he wrote in an essay. “We’re not there yet.”

“That’s why I think we need to raise the federal funds rate to between 5-5.25% and leave it there well into 2024. This will allow tighter policy to filter through the economy and ultimately bring aggregate supply and aggregate demand into better balance and thus lower inflation.”

“If we are going to get inflation back in the range of our target, the breadth of inflation will have to narrow considerably,” Bostic wrote. “When inflation is no longer top of mind, our mission will largely be accomplished. We are clearly not there yet. But I—and the Committee—are committed to doing all we can to ensure that we get there as soon as possible.”