Kansas City Fed president Hoenig says that the Fed should not wait too long to tighten or it may sow the seeds of the next economic crisis.
- Labor market condition stabilizing, employment gains seem imminent
- Challenge ahead is to return to normal policy without hampering recovery
- GDP growth in 2010 to exceed 3%
- Ballooning federal deficit must be controlled and reduced
- Normal level of Fed funds between 3.5 and 4.5%
Not much reaction, but it looks like we can count Hoenig among the cautious hawks like Philly’s Plosser, Dallas’s Fisher and Richmond’s Lacker. After yesterday’s minutes, that group appears to be a small minority.