New York Fed President John Williams said Fed has a “very clear market” that “substantial further progress” needed to be achieved before tapering asset purchases. “That’s where I’m focused, clearly, right now we have not achieved that,” he said.

“This is a time of very high uncertainty,” he noted, adding that “I’m not going to give a forecast of when the committee will come to a decision around changing the pace of asset purchases.” He preferred completing tapering before raising interest rates but “that’s way off in the future for me”.

San Francisco Fed President Mary Daly, in a speech last night, discussed the ongoing challenges with inflation and the labor market. Daly remarked that the inconsistent inflation data this year has not built confidence. While recent figures are promising, it remains uncertain if the path to sustainable price stability is secure.

While, the labor market has been slow to adjust, with only a slight increase in the unemployment rate, Daly warned that “we are getting nearer to a point where that benign outcome could be less likely. ”

Emphasizing Fed’s situation with “two goals, one tool, and a lot of uncertainty,” and Daly stressed that “policy has to be conditional” and policymakers have to “think in scenarios.”

Daly outlined the possible policy responses to different economic scenarios. “If inflation turns out to fall more slowly than projected, then holding the federal funds rate higher for longer would be appropriate.”

Conversely, “If inflation falls rapidly, or the labor market softens more than expected, then lowering the policy rate would be necessary.”

Daly also addressed a middle-ground scenario, saying, “If we continue to see gradual declines in inflation and a slow rebalancing in the labor market, then we can normalize policy over time, as many expect.”

Full speech of Fed’s Daly here.

Cleveland Fed President Loretta Mester told CNBC it’s “not unrealistic” to see some “really bad economic numbers” in terms of unemployment and economic activity declining. However, she added that the current downturn is “not a typical recession” as it happened in an otherwise healthy economy brought to a near standstill to fight the coronavirus.

“Part of the goal now is to offer the kind of lending and making sure the financial markets stay liquid and making sure they stay on a firm foundation and then bridging people from the economy, which in February looked very good … so that when we get to the other side of this … the economy and economic activity can come back,” Mester said.

“One of the things that makes us in a better spot than some other countries is that our banking system was strong coming into this,” she said. “One of the other actions the Fed has taken is to really encourage the banks to continue lending.”

The March consumer expectations survey by the New York Fed showed that perceived chance of losing they job jumped to series high. Expected growth in household income and spending decline sharply. Meanwhile, inflation uncertainty increased in both horizons.

The mean perceived probability of losing one’s job in the next 12 months increased 4.7 percentage points to 18.5%. The reading is a new series’ high and 4.3 percentage points above the 12-month trailing average.

Median household income growth expectations dropped sharply to 2.1%, 0.9 percentage point below its 12-month trailing average. Median household spending growth expectations declined to 2.3%, 0.9 percentage point below its 12-month trailing average.

Median inflation expectations at the one-year horizon were unchanged at 2.5% but decreased at the three-year horizon to 2.4% in March from 2.6% in February. There was a large increase in median inflation uncertainty—or the uncertainty expressed by each respondent regarding future inflation outcomes—at the one-year horizon, and a moderate increase at the three-year horizon.

Full release here.