Boston Fed President Eric Rosengren warned that “the economy remains fragile”. He’s concerned that a second wave of coronavirus infections this fall and winter is “likely” which could cause some states to “impose new restrictions on mobility and face-to-face interactions”. Additionally, additional fiscal support “seems unlikely to materialize any time soon”.

“It would have been fine if the pandemic lasted three months, but the pandemic isn’t lasting three months,” Rosengren said. “It’s lasting much longer than that and so there’s definitely a need for more targeted spending.”

Fed Vice Chair Richard Clarida told Bloomberg that “rates will be at the current level, which is basically zero, until actual observed PCE inflation has reached 2%.”

“That’s ‘at least.’ We could actually keep rates at this level beyond that. But we are not even going to begin thinking about lifting off, we expect, until we actually get observed inflation … equal to 2%. Also we want our labor market indicators to be consistent with maximum employment … So that is the whites of their eyes.”

St Louis Fed President James Bullard said there’s not much of an “imperative” about a new fiscal package now.”It seems like, at least in some broad macroeconomic type of calculation, we have enough resources to cover this,” he said in a Bloomberg interview.

“We might be able to sustain a recovery through this,” he said. “I’m hopeful we still have enough in the pipeline to push us through, get the growth going in the second half of the year. That certainly seems to be what’s happening in the third quarter. I think that will continue in the fourth quarter and the first part of next year.”

Dallas Fed President Robert Kaplan said in a telephone interview that if Fed makes the pledge to keep rates near-zero into 2023, “you need to fulfill it, unless there’s an extraordinary reason why you can’t…. My worry was that this would encourage in the shorter run more risk- taking and maybe create imbalances and instabilities.”

As the economy recovers, the so call-neutral rate will rise. In that case, he said, “if you keep your setting of the fed funds rate exactly where it is, you are actually increasing the level of accommodation.” If unemployment rate approaches 3.5% while inflation is a little below 2%, ” do you actually want to be increasing the level of accommodation? I don’t know if you do or don’t, and that’s the point,” he added.