Harker ('23 voter) Notes Strength Of Food CPI Inflation

• A brief dip in the Fed implied terminal rate on Harker's ('23 voter) prepared speech that the Fed is "likely close" to being done on tightening has mostly been reversed to 5.27%, helped by subsequent commentary that suggests needing to see 25bp increments for a while.
• On today's CPI print, he interestingly brings up the strength of food prices (which printed another 0.5% M/M), adding to Governor's Waller pre-CPI comments on the need to look at measures that impact lower-income people harder and also capture food & energy seeing as they've been showing a largely one-directional trend recently.

Partly paraphrasing: "As have made clear in other public speeches, I think we need to maintain the 25bp path. We are reaching a point where we’ll have done enough. Exactly where that is the data will dictate. It’s going to be above 5% for Fed Funds, how much above 5% will depend a lot on what we’re seeing. Today we had an inflation report that was good in that it was moving down but, not quickly. One of the areas that I personally worry about is the food inflation number was still really high. The problem there is that it’s not a demand issue but continued supply chain issue (brings up eggs). Inflation is going to take some time to come down. I can’t say exactly what we’re going to do in March because we don’t know until then but I do think we need to continue to move above 5 at 25bp increments for a while."