Fed Vice Chair Richard Clarida said in a speech that “we are clearly a ways away from considering raising interest rates and this is certainly not something on the radar screen right now”.

If outlook of inflation and unemployment turn out to be the actual outcomes, the necessary conditions for raising federal funds rate “will have been met by year-end 2022.” If inflation remain well anchored at 2%, commencing policy normalization in 2023 would then be “entirely consistent with our new flexible average inflation targeting framework.”

As for asset purchases, he said FOMC members expected the economy to continue to move toward the standard of “substantial further progress.”

FOMC will asses the progress in coming meetings. He reiterated the pledge that, “we will provide advance notice before making any changes to our purchases.”

Full speech here.

San Francisco Fed President Mary Daly said in a blog post that “myriad factors are tempering labor supply at the moment”. However, ” there is no reason to expect those to be permanent or even highly persistent features of the labor market.”

She pointed to the “aftermath of the Great Recession” as the downturn “put millions of prime-age men and women out of work “. And, “many believed that this would never reverse”.

“But none of those factors proved to be binding,” she said, “As the economy improved, workers came off the sidelines. And year after year, the employment rate rose, eventually surpassing its pre-recession peak”.

“The lesson is simple: Americans want to work and it would be a mistake to assume otherwise,” She concluded.

Full blog post here.

St. Louis Fed President James Bullard told Reuters that current inflation, which is well over Fed’s target, is at levels which former chairs like Alan Greenspan would have “immediately tried to quash.” He called for swift action on ending the asset purchase program. “We are not being that preemptive. Our models say this will settle down, but in the meantime it will be pretty volatile,” he said, “what I want to be prepared for and get the committee prepared for is the risk that this is an unpredictable situation.”

Bullard also said a new “regime” may have arrived and “monetary policy needs to be more nimble.” The global equilibrium was upset by the pandemic, and “the reverberations will continue, and you will have a lot more volatility than you are used to.”

“We will have long, lingering effects as the rest of the world recovers. You have shortages and bottlenecks everywhere. You have Europe likely to grow more quickly in coming quarters,” Bullard said. “You have industries still adjusting to the post-pandemic world – many things happening, and at a pace we are not used to.”

Fed Governor Governor Christopher Waller told CNBC that if August and September jobs report show growth in 800k range, that would be “substantial progress”. Fed could then be “ready to do an announcement in September” on tapering asset purchases.

“That depends on what the next two job reports do,” he added. “If they come in as strong as the last one, then I think you’ve made the progress you need. If they don’t, then you’re probably going to have to push things back a couple months.”

“In my view, with tapering we should go early and go fast in order to make sure we’re in position to raise rates in 2022 if we have to,” he said. “I’m not saying we would, but if we wanted to, we need to have some policy space by the end of the year.”

Waller also expected inflation to return to normal once the impacts of the pandemic wane. “My concern is just anecdotal evidence I’m hearing from business contacts, who are saying they’re able to pass prices through. They fully intend to. They’ve got pricing power for the first time in a decade,” he said. “Those are the sorts of issues that make you concerned that this may not be transitory.”