President Harry Truman famously pleaded for a one-handed economist. “All my economists say ‘on the one hand . . .’, then ‘but on the other . . .’” He would have been happy with today’s Federal Reserve officials, at least in December. Minutes from the Fed’s Dec. 14-15 policy meeting signaled that officials were prepared to raise interest rates faster than they previously anticipated amid growing worries over inflation. And some officials thought the central bank should begin shrinking its $9 trillion balance sheet relatively soon after rate increases begin. That tracked with projections officials submitted in December penciling in three rate increases for next year, and with comments Chair Jerome Powell made at his post-meeting press conference. The unequivocal statement underlines how fast the economic outlook has shifted since early November, when Powell said officials could be patient as they assessed the need for rate increases. Inflation readings have climbed to four-decade highs and price pressures have broadened, as supply chains remain tangled. Meanwhile, strong demand has propelled hiring, pushed down the jobless rate and boosted competition for workers. What was unusual: There was little mention in the minutes of “the other hand,” i.e. the possibility that a slower approach might be necessary, say, if a new Covid variant derailed the recovery. Fed minutes are typically written in a formulaic way. They lay out the baseline view among participants, then usually explain the views of a few people on one side, and a few people on the other. That typical two-sidedness to the decision wasn’t there this time , said Bill Nelson, chief economist at the Bank Policy Institute and the former deputy director of the Fed’s monetary affairs division. “You really get the impression that the committee was divided between people who wanted to do what they did and people who wanted to be tighter still,” Nelson told MM. “That means that there’s significant upside risk to how policy is going to proceed.” The key paragraph: “Participants generally noted that, given their individual outlooks for the economy, the labor market, and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated,” the minutes said. “Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate.” Some officials said a “measured approach” to tightening policy would help them assess incoming data and put them in a better position to respond to a range of outcomes, according to the minutes. But there wasn’t any counterweight to the view that policy should be less accommodative. Consider a similar paragraph from the minutes of the Nov. 2-3 policy meeting , when officials voted to begin tapering asset purchases. It said various officials thought the Fed should be prepared to raise rates sooner than expected if inflation persists but emphasized that a number of policymakers also stressed “a patient attitude” given the uncertainty around supply chain disruptions and the path of the virus. Maximum employment: The minutes suggested a similarly one-sided view among officials on whether and when the Fed may meet its threshold for raising rates. Officials agreed that the labor market was making rapid progress, including solid job gains, a substantial decline in the jobless rate and a labor-force participation rate that had recently edged up. There was no mention of potential slack. “Many participants judged that, if the current pace of improvement continued, labor markets would fast approach maximum employment. Several participants remarked that they viewed labor market conditions as already largely consistent with maximum employment.” Markets got the message loud and clear: Stocks sold off sharply and bond yields climbed Wednesday afternoon as markets digested the uber-hawkish minutes. The S&P 500 fell 1.9 percent, the Nasdaq composite was down 3.3 percent and the Dow Jones Industrial Average declined 1.1 percent. IT’S THURSDAY — Add this one to the #JOLTS file: The Red Sox are looking for a Green Monster scoreboard operator to work inside the left field manual scoreboard. (h/t Dan Primack) Qualifications: “Ability to work in close quarters on days, nights, weekends, holidays” and “in all types of weather & temperatures.” Alas, the position is already closed to new applicants. Hit us up with your dream job listings, plus tips and takes, at kdavidson@politico.com and aweaver@politico.com , or on Twitter at @katedavidson and @aubreeeweaver. | 
