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But did he have to say it?

The financial market would prefer not to think about inflation all the time. The markets are indeed pretty good at ignoring the inconvenient.

But this morning Federal Reserve Bank of St. Louis President James Bullard said out loud what Wall Street knows in its heart but doesn’t want to think about. “Inflation is broader and more persistent than many have thought and the Fed will have to act in order to keep inflation under control and we’ve got a plan in place,” Bullard told Yahoo Finance Wednesday.

That plan includes, at least in the world according to Bullard, moves of 0.50% in at least the next two meetings and a yearend target rate to 3.5% by the end of the year. The Fed’s benchmark short-term rate now stands at 0.75% to 1.00%. “The committee has, based on public comments from my colleagues, coalesced around a plan of 50 basis points per meeting so I think we can proceed on that,” Bullard said.

A yearend rate of 3.5% would require quite a bit more than two 50-basis-point increases.

Stocks didn’t like Bullard’s comments. The Standard & Poor’s 500 showed a loss of as much as 1.95% before closing down 0.13%. The Dow Jones Industrial Average was off 0.33% and the Russell 2000 small cap index lost 0.79%. The NASDAQ Composite actually finished with a gain of 0.66%.