More Fed officials speak today. While they generally sound non-committal to a rate cut, they are all open to, if trade tensions worsen.

Dallas Fed President Robert Kaplan said it’s “early to make a judgement” on rate cut. But he noted “we’re going to be very vigilant in understanding these heightened trade tensions. See if they feed through to the economy. Most importantly, see if they persist.”

Fed Governor Lael Brainard told Yahoo Finance that “we’ll be prepared to adjust policy to sustain the expansion.” And “trade policy is definitely a downside risk to the economy. And our job is to sustain the expansion, and we’ll need to see going forward what that means for policy.”

Chicago Fed President Charles Evans told Bloomberg TV that he’s “a little nervous about the low inflation rate”. And, “that by itself could be a reason for a little more accommodation.”

Fed Vice Chair Richard Clarida emphasized yesterday that policymakers would “put in place policies that not only achieve but sustain price stability and maximum employment, and we’ll do that if we need to.” He added that interest rates are now at the lower end of that range consistent with 2% inflation. While markets are pricing in rate cuts as tariff wars have intensified, he noted Fed shouldn’t be “handcuffed” to fluctuations in markets.

On yield curve, Clarida said “historically a flat yield curve doesn’t convey a lot of information”. However, if yield curve inversion “persists for some time”, “that’s obviously something I would definitely take seriously.” But for now, “I would not view this as a strong signal of concern. We are early into it. It’s certainly something we’ll keep looking at.”

Separately, in a WSJ interview, Dallas Fed Robert Kaplan sounded calm regarding the trade tensions between US, China and Mexico. He said: “I want to take a little bit more time and be patient here, because some of these recent events could be reversed… Worth being cognizant of the fact that these recent tensions have just elevated in the last five, six weeks… And in the next five, six weeks, a number of them could be alleviated.”

In the opening remarks at the “Conference on Monetary Policy Strategy, Tools, and Communications Practices”, Fed Chair Jerome Powell said policy makers “do not know how or when” the issues on trade negotiations and other matters will be resolved. But they are closely monitoring the implications on economic outlook. And, Fed will “act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective.”

For the rest of the remarks, Powell focus on the longer-run issues related to the public review on monetary policy strategy, tools and communications. Specifically, the review in focused on three questions:

1. Can the Federal Reserve best meet its statutory objectives with its existing monetary policy strategy, or should it consider strategies that aim to reverse past misses of the inflation objective?
2. Are the existing monetary policy tools adequate to achieve and maintain maximum employment and price stability, or should the toolkit be expanded?
3. How can the FOMC’s communication of its policy framework and implementation be improved?

Full remarks here.

Chicago Fed President Charles Evans insisted in a CNBC interview that the economy remains solid and interest rate is at the right place. He said “our current setting has been appropriate, but if we sense that there was some greater uncertainty, some softening, we’d have to take that into account and ask, are we getting in the way of the economy.”

While markets are betting on Fed rate cuts this year, Evans said they are “something that I haven’t yet seen in the national data.” In particular, he pointed out that consumption and employment continued to be strong, even though business investment as not as strong as he’d like.