The Fed is set on tightening

The Phillips Curve crowd, led by Yellen, thinks falling unemployment will bring more inflation. But have some qualms:

Fed Minutes: Officials in December Expressed ‘Significant Concern’ About Low Inflation

Minutes also show worries about global growth and strong dollar

“Because of their significant concern about still-low readings on actual inflation and the uncertainty and risks present in the inflation outlook, (officials) agreed to indicate that the (Fed) would carefully monitor actual and expected progress toward its inflation goal,” the Fed said in minutes of its Dec. 15-16 policy meeting released Wednesday.

But they hiked rates anyway!

Then there is the “financial crisis” group led by Fischer

For Vice Chairman Staley Fischer markets are wrong. There will be more tightening:

Fed’s Fischer Says Four Interest-Rate Increases Possible This Year

Fed vice chairman in CNBC interview says market expectations of two interest-rate increases are ‘too low’

Fischer worries Fed can’t head off, contain financial crises

Fischer’s comments suggest that the central bank may need to rely more on monetary policy to restrain financial excesses than it has in the past. In fact, he told the conference that it might be necessary for the Fed to increase interest rates if financial markets were overheating, though the first line of defense should be the use of regulatory measures to head off bubbles.

A rate hike was the “mutually satisfactory” outcome.