St. Louis Fed President James Bullard said overnight that the “spate of weaker data” is “probably mostly temporary”. And, the “notion of a rebound in the second quarter is a good forecast:. Meanwhile, it’s “premature to contemplate a rate cut here”. He added “you do want to watch the data closely”, and “you won’t really know that until you get to the July time frame.” To him, that would be the next time to revisit rate cut.

On yield curve inversion, Bullard said “you would have to get a wider variety of spreads to be inverted — the two-year/10-year in particular”. Also, he noted ” it would have to stay inverted and be meaningfully inverted for awhile, a matter of months or even quarters, before you would say it that it was sending a negative signal that’s in the same sense that it did historically.”

New York Fed President John Williams said overnight that the “most likely case” was for US economy to grow 2%, with low unemployment. To him, the probability of recession this year or next was “not elevated relative to any year”. He also downplayed the significance of yield curve inversion. He added “there’s a lot of reasons to think that it has been a recession predictor for reasons in the past that kind of don’t apply today.” And, it only “telling us that growth will be pretty modest”.

On monetary policy, Williams said short-term interest rate is “around neutral”. Meanwhile, “any development in the economy, whether it’s on the employment side or on the inflation side, that moved in a persistent way away from our objectives, one way or the other, would be a reason to rethink the path of policy going forward.”

Fed Vice Chair Richard Clarida gave a speech at a symposium in France today. There he noted that the US economy’s integration with the rest of the word has risk substantially over the past 60 years. That heightened US exposures to external shocks through channels of direct trade links, foreign exchange markets and contagion in financial markets.

Clarida added recently, US and other financial markets are “attuned to a number of prominent downside global risks”, including Brexit, a sharp slowdown in growth and trade tensions. He noted that Fed policymakers can “hardly ignore these risks”. Indeed, he pointed out three of the most recent FOMC statements have highlighted concerns about global economic and financial developments.

He also reiterated Fed’s stance that “in the presence of these risks and with inflation pressures muted, we can afford to be patient and data dependent as we assess in future meetings what adjustments in our policy rate might be necessary to sustain growth, employment, and price stability in the U.S. economy.”

Clarida’s remarks here.