Boston Fed President Eric Rosengren said Fed is still a “long way from raising rates” and the central bank hopes to keep both short- and long-term borrowing costs “quite accommodative. The US will be in a situation “where the economy is growing more slowly than we might have hoped a few months ago”.

Rosengren noted that “some of the better economic data we’ve been getting has reflected the fact that those places are opening up, but they may not be opening up as safely as they need to.” He’s concerned that positive headline may mask the underlying health implications of re-opening.

Fed Vice Chair Randal Quarles said that the current high inflation was transitory, due to supply chain imbalances and higher demand. He said, “if a year from now we were not to see inflation settling back down to something that’s closer to our 2% target… we have the tools at the Fed to then begin – as we traditionally would – to increase interest rates, to change our monetary policy in a way that would address that inflation.” He noted that “we’re not behind the curve”.

Separately, Richmond Fed President Thomas Barkin said, “it’s pretty clear to me we have had substantial further progress against our inflation goal”. “I’m pretty optimistic about the labor market. … If the labor market opens as I suggested it might, then I think we’re going to get there in relatively short order.”

“I kind of think let’s look at it next year and see what happens and if the numbers hit, great, if they don’t, we’ve got time because it will show there’s still more time for the economy to grow,” Barkin said.

Chicago Fed President Charles Evans indicated that Fed could have delivered enough rate cuts to lift inflation back to 2% target, and probably some overshooting. He said that rising trade and geopolitical risks led to global slow down. And the “situation called for us to cut policy rates 50 to 75 basis points below the long-run neutral rate and then leave policy on hold for a time”.

“And, this more accommodative stance is needed to support a roughly similar growth outlook to what I had anticipated before and, importantly, to support moving inflation up with greater assurance to achieve our symmetric 2 percent goal within a reasonable time.”

After rate cut back in July and September, federal funds rate is now sitting at 1.75-2.00%, comparing to neutral rate of 2.50%. Evans said that the current monetary policy stance “could well result in inflation modestly overrunning 2% for some time.

Cleveland Fed President Loretta Mester “each meeting is going to be in play” regarding interest rate decisions. She added, “we’re going to assess conditions, we’re going to assess how the economy’s evolving, we’re going to be looking at the risks, and we’re going to be removing accommodation.”

On the idea of a 50bps rate hike in March, Mester said “I don’t like taking anything off the table.” However, “I don’t think there’s any compelling case to start with a 50 basis point”.

“Again, we’ve got to be a little bit careful. Even though you can well telegraph what’s coming, when you take that first action, there’s going to be a reaction,” she added.

On the topic of balance sheet runoff, Mester said, “I would support selling some of our mortgage-backed securities at some point during the reduction period to speed the conversion of our portfolio’s composition to primarily Treasuries.”

New York Fed President John Williams said in speech that recent FOMC statement well summarized the current US economy, with the word “strong” appeared five times. And Fed “has attained its dual mandate objectives of maximum employment and price stability about as well as it ever has.” He added that “most indicators point to a very strong labor market” while “inflation is right on target:”

He expected fiscal stimulus and favorable financial conditions to provide “tailwinds” to the economy for more strong growth. He expected real GDP to grow by 3.0% in 2018 and 2.5% in 2019. Unemployment rate is expected to edge down to slightly below 3.% next year. Price inflation is expected to move up a bit above 2%. But he added that “I don’t see any signs of greater inflationary pressures on the horizon.”

Regarding removal of “accommodative” language in latest FOMC statement, Williams said “these more concise statements do not signify a shift in our monetary policy approach.” And, they just “represent the natural evolution of the language describing the factors influencing our policy decisions “. And the changes in communications are signs that Fed is “nearing the end of the process of normalizing monetary policy”.

His full speech here.

Fed Chair Jerome Powell said in a speech that the economic expansion is “still far from complete”. “At this early stage I would argue that the risks of policy intervention are still asymmetric,” he added. “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses.”

Powell also noted, “the risks of overdoing it seem, for now, to be smaller. Even if policy actions ultimately prove to be greater than needed they will not go to waste. The recovery will be stronger and move faster.”

On the economy, Powell also said that the improvement has “moderated” and  “risk that the rapid initial gains from reopening may transition to a longer-than-expected slog back to full recovery.”

Full speech here.