Richmond Fed president Lacker is on the wires implying that the Fed risks losing credibility if it does not act to reduce its balance sheet once the economy has established that it is on solid footing. He seems to err on the side of moving before the economy is certain to maintain growth to reduce the risk of losing credibility. He downplays the odds of a further big drop in inflation and says economic recovery is solidly underway.
Lacker is a known hawk, but his is a minority view on the FOMC, which tends to want to want to nurse the economy for a good long time via low, low rates.
