KC's George: 50bp Possible But No Inter-Meeting Hike

KC Pres George, who's among the most hawkish FOMC members, tells the WSJ in an interview conducted Friday/published this morning that she's uncertain about the path ahead for rates. Given the hawkishness of the source, her comments appear to be a dovish rebuttal to currently hawkish market pricing.

• She tells the WSJ that she hasn't yet decided how much the Fed needs to raise rates this year, but says their policy is "out of sync" w economic conditions. And that it's too early to say whether the FOMC should hike 50bp in March though that market pricing, if still in place by the meeting, "paves the groundwork for discussion".
• She also tells the WSJ the Fed has to be "systematic" and "it is always preferable to go gradual", and "I'd be hard-pressed to say we have got to get to neutral really fast". She says that inter-meeting moves are reserved for emergencies, which doesn't apply to the current situation.
• She says the Fed should consider actively selling assets while hiking rates. Her reasoning is similar to comments she has made previously: maintaining a large SOMA portfolio continuing to put downside pressure on long-term rates even as short-term rates are rising, thereby potentially flattening the curve.