The Federal Reserve has to emulate Mario Draghi and do “whatever it takes” to bring inflation down and that means continuing to raise interest rates even if there is a recession, said former Richmond Federal Reserve President Jeffrey Lacker on Friday.

“To let your foot up off the brake before inflation has come down” is just a “recipe for another recession down the road,” Lacker said, in an interview on Bloomberg Television.

How high does the Fed needs to take its benchmark interest rate?

Lacker said the Fed needs to get its policy rate above “expected inflation rate.” That means a Fed funds rate in the neighborhood of 6%, he said.

Traders in the Fed funds futures market don’texpect rates to get anywhere close to 6%.

According to the CME FedWatch tool, the market expects the central bank to raise its benchmark rate to a range of 3.25- 3.5% by the end of the year and start to cut next summer as the economy weakens.

Lacker said he didn’t think the Fed should go slow.

Lacker said he doubts that inflation expectations will fall to 3.5-4% by the end of the year and that’s why the Fed will need to raise rates higher.

The central bank “might as well get it done” and get rates up fast, he said.

Read: Will the Fed get lucky and avoid a hard landing?

At its July policy meeting next week, the Fed is widely expected to hike its benchmark rate by 0.75 percentage points to a range of 2.25-2.5%.

Source: finance.yahoo.com