Fed Chair Jerome Powell said Fed is “on track” to start tapering the asset purchases. “Supply constraints and elevated inflation are likely to last longer than previously expected and well into next year, and the same is true for pressure on wages,” he added. “Of we were to see a risk of inflation moving persistently higher, we would certainly use our tools.”

Separately, San Francisco Fed President Mary Daly said recent “eye-popping” inflation will subside with the pandemic. The decision on not raising interest rate is appropriate. “Just because we are standing pat, being patient, is not the same as being asleep,” Daly said.

Atlanta Fed Raphael Bostic told CNBC he has “penciled in” a rate increase in “late third, maybe early fourth” quarter of 2022. “Our experience from the pandemic has really frankly surprised to the upside,” he added “I’ve really adjusted my expectations moving forward.”

Bostic expected the supply chain disruptions to “last longer than we expected”. He said, “the labor markets are not going to get to equilibrium as quick as we hoped, but demand was also going to stay high and that combination was going to mean we’re going to have inflationary pressures.” It’s becoming “clearer and clearer” inflation pressure “is going to last into 2022.”

Cleveland Fed President Loretta Mester told CNBC “the thought about raising interest rates is not a near-term consideration at all.” Instead, “we’re going to think about the decision coming up, which is about the asset purchases, and then as those wind down we’ll have time to assess where the economy is.”

“I don’t think that interest rate hikes are coming any time soon because I don’t think we’ll reach our goals which are maximum employment and inflation at and above 2% for some time,” Mester said.

“So far the medium-run inflation expectations and longer-run inflation expectations are still at levels consistent with our 2% inflation goal,” she said. “We don’t want to get into a situation where they continue to move up because that would be a signal that we may have to do an adjustment.”

Fed Governor Randal Quarles said in a speech, “we have met the test of substantial further progress toward both our employment and our inflation mandates”. He would “support a decision at our November meeting to start reducing these purchases and complete that process by the middle of next year”.

He said Fed is not behind the curve on inflation, for three reasons: “Most of the biggest drivers of the very high current inflation rates will ease in coming quarters, some measures of underlying inflation pressures are less worrisome, and longer-term inflation expectations are anchored, at least for now”.

But, “forecast for growth and uncertainty about the resolution of supply constraints mean that there are upside risks to inflation next year.. Hence, his focus is “beginning to turn more fully from the rapidly improving labor market to whether inflation begins its descent toward levels that are more consistent with our price-stability mandate.”

“I would also be quite wary of further increases in inflation expectations in this environment,” Quarles said, “if inflation does remain more than moderately above 2 percent, be assured that the FOMC has the framework and the tools to address it.

Full speech here.