Boston Fed President Eric Rosengren warned that tight labor market could push the economy towards unexpected inflation and other problems. He argued that Fed should continuing rate hikes “until monetary policy becomes mildly restrictive.”

And he emphasized that “the further we get from full employment the further risk there is.” Also, he added “pushing the economy too hard risks inflationary concerns or financial-stability risks”. Either of these outcomes “might necessitate a more forceful monetary policy response.”

While there are no “alarm going off” for now, he said “there are a bunch of yellow lights”. these include commercial housing estate boom that could push prices beyond what market demand could sustain.

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On the other hand, Minneapolis Fed President Neel Kashkari saw “flashing yellow” signals in the bond market, which suggested there is no need for any more rate hikes for now. He said “the bond market is saying, ‘hey we’re not so sure that the U.S. economic growth is going to be very strong in the future years,’ so that’s a nervousness for me.”

Kashkari added yield curve is “a measure of giving us feedback as to are we running accommodative monetary policy or contractionary monetary policy, and I don’t see any reason yet that we should be moving interest rates up and tapping the brakes.”

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