Former Richmond Fed Pres. Lacker: The Fed should provide guidance that's more 'two-sided'

• Lacker believes the FOMC has been overly optimistic about disinflation for a year and a half.
• He argues that current Fed policy is more accommodative than the Fed thinks.
• Lacker cautions against cherry-picking inflation numbers and relying on a weak labor market to curb inflation, citing lessons from the 1970s.
• He suggests the Fed should provide more 'two-sided' guidance, preparing markets for potential rate increases if inflation doesn't subside.

Former Richmond Fed President Jeffrey Lacker discusses the Fed's rate path, arguing that the FOMC has been overly optimistic about disinflation. He believes current policy is more accommodative than perceived and warns against cherry-picking inflation data or relying on a weak labor market as an inflation shield. Lacker suggests the Fed should prepare markets for potential rate increases if inflation persists.