San Francisco Fed President Mary Daly said in a CBS New interview, “if you’re out in the economy, you don’t feel like you’re in a recession. That’s the bottom line. The most important risk out there is inflation. And I think the job market just confirms that.”

She added that a 50bps hike in September is still “absolutely” appropriate. “And we need to be data dependent. It could. We need to leave our minds open. We have two more inflation reports coming out, another jobs report. We continue to collect all the information from the context we talk to you to see how this is working its way through the economy,” She said.

Full transcript of the interview here.

Fed Governor Michelle Bowman sad in a speech over the weekend, she supported Fed’s 75bps rate hike in July, as well as the view that “ongoing increases” would be appropriate at “coming meetings”.

“My view is that similarly-sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way,” she added.

Bowman saw a “significant risk of higher inflation into next year for food, housing, fuel, and vehicles.” And, the supply problems seem “likely to persist”. But job market was tight with unemployment rate finally returning to the pre-pandemic level of 3.5%. Her base case is for a pickup in growth during H2, and for moderate growth in 2023.

Full speech here.

Cleveland Fed President Loretta Mester said that “interest rates continue to rise this year and into next year through the first half and maybe by then we can pause and we can start bringing them back down.” She would “pencil in going a bit above four as appropriate”.

As for September meeting, she said, “it’s not unreasonable to think we might have to do a 75 (basis point move) but I can imagine it could be a 50. We’ll just have to look at the data as it comes in.”

Minneapolis Fed President Neel Kashkari said yesterday that Fed moved too slowly in 2021 in tackling high inflation. He’s concerned that inflation is pulling wages up and there are risks of going into a wage-driven inflation story. As inflation is spreading, he said that Fed need to act with urgency.

There are some financial markets that are indicating that Fed will cut interest rates in 2024. But Kashkari said, “I don’t want to say it’s impossible, but it seems like that’s a very unlikely scenario right now given what I know about the underlying inflation dynamics.”

“The more likely scenario is we would continue raising (interest rates) and then we would sit there until we have a lot of confidence that inflation is well on its way back down to 2%,” he said.

San Francisco Fed President Mary Daly said, “about 50% of the elevated inflation we’re seeing is from demand factors, 50% from supply factors.”

“50 bps hike would be a reasonable thing to do in September but if we see inflation roaring ahead undauntedly then perhaps 75 bps hike would be more appropriate,” she added.

Also, she does not believe that Fed has reached the threshold for interest rate to be considered restrictive As for tightening, having rate at 3.4% by the end end is a “reasonable place” to get to.

Richmond Fed President Thomas Barkin said in a speech, “we are committed to returning inflation to our 2 percent target and have made clear we will do what it takes.” He expected Fed’s tools to “work over time” and “inflation to come down but not immediately, not suddenly and not predictably”.

“There is a path to getting inflation under control,” he said. “But a recession could happen in the process.”

“We are out of balance today because stimulus-supported excess demand overwhelmed supply constrained by the pandemic and global commodity shocks. Returning to normal means products on shelves, restaurants fully staffed and cars at auto dealers. ”

“Most importantly, moderating demand has a higher purpose squarely in our mandate: containing inflation. If there is any lesson that’s been relearned in the last year, it is that inflation is painful, and everyone hates it.”

Full speech here.