In a prepared speech in New York, Boston Fed President Eric Rosengren said that a potential overshoot of economic growth and inflation likely to call for a faster rate hikes from the US Federal Reserve than the central bank had forecasted in the December meeting. In December, Fed forecasted three rate hikes in 2017. Though the financial market participants remain skeptical of three rate hikes, several Fed policymakers have called for faster rate hikes than the market is forecasting. According to the Boston Fed President, the economic growth this year and next could exceed Fed’s estimates and according to him if that materializes, “it is reasonable to expect additional labor market tightening, gradual increases in inflation and, potentially, emerging imbalances in some asset markets.”

Numbers released yesterday show that consumer price as measured by CPI rose by 0.6 percent in January this year, up 2.5 percent from a year ago. Core CPI is up 2.3 percent. Mr. Rosengren warned that inflation has indeed reached Fed’s 2 percent goal and the central bank now risks overshooting; hence, three rate hikes in 2017 appropriate even a bit more.

However, Mr. Rosengren does not have a vote this year. So, our FOMC dashboard remains unchanged and is laid out below.

Doves – Lael Brainard, William Dudley, and Neel Kashkari.

Hawks – Janet Yellen, Charles Evans, Patrick Harker, Stanley Fischer, and Robert Kaplan

Unknown – Jerome Powell

Pls. note that one of the dovish members, Daniel Tarrullo has resigned and the position is yet to be filled.