New York Fed President William Dudley said that three or four rate hike is a “reasonable expectation” for 2018. And, “as long as inflation is relatively low, the Fed is going to be gradual.” However, “if inflation were to go above 2 percent by an appreciable margin”, “the gradual path might have to be altered.”

Nonetheless, for now, “the market understands that more than four is quite unlikely, because that would no longer be a gradual path of monetary policy tightening.” He added that ” the market sort of sees three as possible and four as possible, but five or six seems to be quite unlikely.”

Regarding trade war with China, Dudley said the US has “legitimate issues” with China over trade. However, “if trade barriers go up, it’s bad for the U.S. economy. You’re going to have more inflation, less growth, lower productivity, just bad, bad outcomes.”

Dallas Fed president Robert Kaplan expect solid growth in the US this year, with falling unemployment and rising wages. According to him, unemployment rate could fall further to as low as 3.7%. However, he warned of sluggish growth ahead.

He noted that “because the near-term outlook for GDP growth is positive, this may lull observers into believing we are on a path to sustained improvement in the economic performance of the U.S. economy.” However, as the effect of tax cut and budget stimulus fade, also as Fed normalizes monetary policy, growth will fall below 2% after next year.

He added that “unless Congress and the White House initiate structural reforms that improve workforce growth, education and skill levels of our labor force, moderate the expected path of government debt growth, and adopts policies that allow us to capture the opportunities provided by globalization, we are likely to see sluggish rates of GDP growth in the medium and longer term,”

Also, Kaplan pointed out that business are lacking pricing power for the moment. He noted “pricing power of businesses is more limited than we’re historically accustomed to seeing at this stage in an economic expansion.” And that could limit inflation and inflation expectations.

Minneapolis Fed President Neel Kashkari is seen clearly as a dove as he voted against al three of Fed’s rate hikes last year.

He said in a WSJ interview published today that fiscal stimulus of the federal government, including tax cuts would make Fed meeting its 2% inflation target more likely. The tax cuts and spending increases are “macroeconomically significant, and they are big enough to have an effect on the trajectory of the economy… that could change things in a meaningful way.” And with that development, Fed can move ahead with the planned tightening.

But he also argued that “it isn’t going to be obvious to me once we achieve our inflation target that we need to now put the brakes on the economy.” He reiterated his stance that ” once we achieve our inflation target, we should try to get to neutral in a reasonable period of time,”

And he added that “we might be one hike away from achieving neutral.”

Boston Fed President Eric Rosengren sounded hawkish in his comments today. Referring to Fed’s projection of two more hikes this year, Rosengren said that “somewhat more tightening may end up being needed”. He expected a “somewhat stronger” economy ahead than the already “quite positive” FOMC projections. He also pointed to solid performance in job creation, falling unemployment and inflation close to Fed’s 2% target.

However, Rosengren also pointed out short-run and long-run risks to the positive outlook.

For the short run risks, he pointed to trade tension. He noted that “it would take a significantly broader set of trade actions than those reported to date to materially reduce the roughly $2.4 trillion in annual U.S. exports.” But still “spillover effects are possible.”

Another run risk is an overheated “boom-bust” scenario. Particularly, “periods in which unemployment dipped significantly and persistently below the estimated natural rate historically have tended to generate conditions that resulted in a recession.”

In the long run, he expressed his concern regarding the narrowing of fiscal and monetary buffers. He said “by using up so much fiscal capacity now – by which I mean the ability to lower tax rates or boost federal spending to offset economic weakness – the country risks not having sufficient fiscal capacity in the future when it might be needed.”

There would be also be little room for monetary policy to respond to a large adverse shocks considering the median forecast among FOMC members for longer-run interest rates is 2.9 percent – “quite low” by historical standards