Fed Vice Chair Randal Quarles said in a speech that, “a significant portion of that recent boost to inflation will be transitory”, and it “will not interfere with the rapid growth driving progress toward the Fed’s maximum-employment goal.” He expected “strong recovery will keep rolling forward”. Nevertheless, “uneven global recovery” and “supply bottlenecks” are two “potential headwinds” for the economy.

Quarles added that, “if my expectations about economic growth, employment, and inflation over the coming months are borne out, however, and especially if they come in stronger than I expect, then, as noted in the minutes of the last FOMC meeting, it will become important for the FOMC to begin discussing our plans to adjust the pace of asset purchases at upcoming meetings.”

However, “the time for discussing a change in the federal funds rate remains in the future. The guidance for the federal funds rate commits to maintain the current rate until labor market conditions are consistent with our goal of maximum employment and inflation not only has reached 2 percent, but also is on track to moderately exceed 2 percent for some time.”

Full speech here.

San Francisco Fed President Mary Daly told CNBAC that “we haven’t seen substantial further progress just yet. We’re still looking for substantial further progress.”

“What we’ve seen is some really bright spots, some very encouraging news. It gives me hope, and I am bullish for the future. But it’s too early to say that the job is done,” she added.

Also, “we’re talking about talking about tapering, and that is what you want out of us. You want to be long-viewed here,” she said. “But I want to make sure that everyone knows it’s not about doing anything new. Right now, policy is in a very good place. Policy is supporting the American people.”

Chicago Fed President Charles Evans said in a speech that an “accelerationist view” was on the minds of those who warned about an outbreak of inflation. But to him, “this risk is low”.

“It is important to emphasize that the recent increase in inflation does not appear to be the precursor of a persistent movement to undesirably high levels of inflation,” he added. “I have not seen anything yet to persuade me to change my full support of our accommodative stance for monetary policy or our forward guidance about the path for policy.”

Full speech here.

Kansas City Fed President Esther George said she’s “not inclined to dismiss today’s pricing signals or to be overly reliant on historical relationships and dynamics in judging the outlook for inflation.” But she didn’t explicitly indicated whether she’s ready to adjust monetary policy for now.

“The structure of the economy changes over time, and it will be important to adapt to new circumstances rather than adhere to a rigid formulation of policy reactions,” she said. “With a tremendous amount of fiscal stimulus flowing through the economy, the landscape could unfold quite differently than the one that shaped the thinking”.

St. Louis Fed President James Bullard said yesterday that “we’re not quite there yet” to scale back the monetary stimulus. Vaccinations are bringing the economy “closer and closer” to the pre-pandemic state. “I think there will come a time when we can talk more about changing the parameters of monetary policy, I don’t think we should do it when we’re still in the pandemic,” he added.

Bullard also said, “we’ll see if the demand really flows through to a lasting increase in inflation or if this is just temporary. I think it’s mostly temporary but then some of it will flow through to inflation expectations.” He expected inflation to rise above 2% in 2021 and into 2022.