Atlanta Fed President Raphael Bostic said the job markets had made “sufficient” gains to allow tapering the USD 120B per month asset purchases. He “would be comfortable starting tapering of asset purchase program in November.”

Nevertheless, he noted that “there is significant uncertainty about how long inflationary pressures will last.”

San Francisco Fed President Mary Daly said on Sunday that there will be “ups and downs” in the job market recovery, as “Covid is not behind us”. She admitted that “Delta has taken a toll” but remained upbeat that “it hasn’t yet derailed us”.

“It’s too soon to say it’s stalling, but certainly we’re seeing the pain of COVID and the pain of the Delta variant impact the labor market,” she said.

“I don’t have a different view than I had on it when we first started. It’s going to be hard and as goes Covid, so goes the economy,” she added.

Daly also said, “everyone is feeling the rising prices” for energy, good and basic services. “This is really hard. And it’s also really directly related to Covid. It’s related to the supply bottlenecks, to the disruptions. But I don’t see this as a long-term phenomenon.”

Cleveland Fed Bank President Loretta Mester said in a panel discussion yesterday that inflation in the US is “pandemic related” only. “Fundamentally, if it’s supply-side driven, that’s not something monetary policy should be responding to,” Mester added.

On monetary policy, she said, “our new strategy says, look, we’re not going to be moving until we have average inflation being 2% and we’re now going to be making up for past misses. I think we’ve basically met that part of the mandate.”

“My forecast is that we’ll meet that [employment] mandate by the end of next year, if things play out as I expect,” Mester said.

“My baseline is we’ll see inflation rates move back down as pent-up demand eases and supply-side challenges ease. But, as you know, that is taking longer than people thought and, in some cases supply chain issues are getting worse,” Mester said.