Comments from Fed’s Lacker:

  • Says policy must ensure inflation expectations do not drift from 2% goal
  • Expects inflation to gradually converge on 2%
  • No more labor underutilization now than in past when unemployment was 5.9% before
  • Sees slow employment growth, about 1% productivity
  • Repeats opposition to holding MBS in portfolio
  • Sustained 3%-plus growth unlikely

For one of the Fed ‘hawks’, he doesn’t sound like someone who will be pounding the table at the FOMC in favor of sooner hikes.