“Heredity” at the Fed?

In Kansas City serial dissenter Hoenig was followed by frequent dissenter (mind you, all in the upward direction) George.

At the Philly Fed it seems that “ultra” hawk Plosser is well represented by would be “clone” Harker:

Although I cannot give you a definitive path for how policy will evolve, I can easily see the possibility of two or three rate hikes over the remainder of the year. That said, all forecasts are subject to fairly wide confidence bands, and mine is no exception.

So, even though I am aware that many of you are growing tired of the phrase “data dependent,” that is exactly what I will be. In the end, it is the tried-and-true way for conducting monetary policy.

If only they were able to interpret data properly! His “mentor”, Plosser, did a great job of interpreting data back in July 2008 (right at the cusp of the “Great Recession”!!!):

In sum, this year and next will be quite challenging. The economy will grow this year but at a slow pace, and the unemployment rate is likely to get worse before it gets better. At the same time, inflation will be uncomfortably high for a while.

I am more optimistic about the outlook for 2009 and I expect we will see economic growth return to near its longer-term trend. But to prevent recent inflation from continuing to plague the economy and to avoid a rise in inflation expectations, I believe the current very accommodative stance of monetary policy will need to be reversed, and depending on how economic conditions evolve, I anticipate that this reversal will likely need to begin sooner rather than later.

As policymakers, we must remember that the path of inflation over some intermediate term is not independent of our policy decisions. While monetary policy cannot control relative price movements, sustained inflation is not something that is imposed on us. As policymakers we have a choice. If we remain overly accommodative in the face of these large relative price shocks to energy and other commodities, we will ensure that they will translate into more broad-based inflation that — once ingrained in expectations — will be very difficult to undo. I believe we must and will take the appropriate steps to ensure that does not happen.

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