Cleveland Federal President Loretta Mester said, “at this juncture, the incoming data have not changed my view that we will need to bring the fed funds rate above 5% and hold it there for some time to be sufficiently restrictive to ensure that inflation is on a sustainable path back to 2%.”

“Setting aside what financial market participants expected us to do, I saw a compelling economic case for a 50-basis-point increase, which would have brought the top of the target range to 5%,” she said.

“It is welcome news to see some moderation in inflation readings since last summer, but the level of inflation matters and it is still too high,” She said. Adding that the January CPI data “showed a jump in the monthly rate of overall inflation and no improvement in underlying inflation”

Mester said “I continue to see the risks to the inflation forecast as tilted to the upside for a number of reasons.” She also said “the transition back to price stability will take some time and will not be without some pain.”

The impact of Fed policy actions “will result in growth well below trend this year and some cooling off in labor markets, with slower employment growth and an increase in the unemployment rate from its very low level.”

New York Fed President John Williams said yesterday, “We will we stay the course until our job is done… We must restore balance to the economy and bring inflation down to 2 percent on a sustained basis.”

“We need all the gears turning at the right pace to restore balance between demand and supply in the entire economy,” said Williams. “We still have some way to go to achieve that goal.”

He expects core inflation, as measured by core PCE reading at 4.4% in December, to fall to 3% this year and then 2% over the next few years. Growth will likely slow to just 1% this year, with unemployment rate to rise to between 4% and 5%.

Philadelphia Fed President Patrick Harker commented on yesterday’s inflation report and said “it was good and it was moving down, but not quickly.” He added that FOMC will have to “let the data dictate” tightening, and, “It’s going to be above 5% in the Fed funds rate. How much above 5? It’s going to depend a lot on what we’re seeing.”

“In my view, we are not done yet… but we are likely close,” he said. “At some point this year, I expect that the policy rate will be restrictive enough that we will hold rates in place and let monetary policy do its work,” he noted in a prepared speech”.

“Rates are now at a level that allow us to slow down and proceed cautiously and, to my mind, the days of us raising 75 basis points at a time have surely passed,” Harker said. “Just at the last meeting, I voted for a hike of 25 basis points — what some would call slow but actually is closer to cruising speed when it comes to tightening.”

Dallas Fed President Lorie Logan said, “we must remain prepared to continue rate increases for a longer period than previously anticipated, if such a path is necessary to respond to changes in the economic outlook or to offset any undesired easing in conditions.”

“And even after we have enough evidence that we don’t need to raise rates at some future meeting, we’ll need to remain flexible and tighten further if changes in the economic outlook or financial conditions call for it,” she added.

“The most important risk I see is that if we tighten too little, the economy will remain overheated and we will fail to keep inflation in check,” Logan said. “That could trigger a self-fulfilling spiral of unanchored inflation expectations that would be very costly to stop.”

“My own view is that, given the risks, we shouldn’t lock in on a peak interest rate or a precise path of rates,” she said.

Richmond Fed President Thomas Barkin told BloombergTV that today’s US CPI data is “about as expected”.

“Inflation is normalizing but it’s coming down slowly. I just think there’s gonna be a lot more inertia, a lot more persistence to inflation than maybe we’d all want,” he added.