Former Richmond Fed Pres. Lacker: The Fed should provide guidance that's more 'two-sided'

Summary

Former Richmond Fed President Jeffrey Lacker told Squawk Box that the FOMC has been too optimistic on disinflation and that policy is more accommodative than officials believe. He argued the Fed should not look through tariff-driven inflation or assume a weak labor market blocks inflation, and he wants two-sided guidance that prepares markets for possible rate hikes if inflation persists. Lacker said he would not hike immediately but sees little evidence policy is restrictive.

• Lacker criticized the Fed's disinflation optimism and said policy is not restrictive.
• He argued a productivity surge could pull forward spending and pressure resources.
• He rejected the idea that tariff-driven inflation is temporary and can be ignored.
• He rejected the view that a weak labor market prevents inflation transmission.
• He would not raise rates immediately but favors two-sided guidance.
• He warned markets may be too focused on cuts and should prepare for hikes if inflation persists.
• He discussed how the Fed thinks about potential growth and economic shocks.