I advocated for a 50 BPS increase by the Fed for its February FOMC meeting (it executed a 25 BPS increase). Perhaps the Fed will execute a 50 BPS increase in the Fed Funds rate when the FOMC meets on March 22nd. The current Fed Funds target range is 4.50-4.75%.
With prices having accelerated sequentially last month, the Fed needs to further tighten monetary policy or risk price inflation moving persistently higher.
It appears the Fed’s preferred method of tightening is the Fed Funds rate as the Fed has executed its Quantitative Tightening (QT) effort with kid gloves.
Therefore, the Fed ought to take the Fed Funds rate above the percentage change in year-over-year CPI. At present, year-over-year CPI is north of Fed Funds (6.41% to 4.58%), thus the Fed is technically in an accommodative monetary policy stance.