St. Louis Fed President James Bullard said yesterday that right now “it is looking good” as “we are coming to the end of the war here” with the pandemic. He forecast US GDP to grow 6.5% this year, while unemployment rate will fall to 4.5%. He also expects inflation to climb to 2.5%.

But, “I’d like to see actual data come in that verifies this forecast and verifies the idea that it’s going to be a very strong year for the U.S. economy,” he added. “We are still in a crisis. It could go the wrong way. So we really want to get the pandemic behind us before we start contemplating changes.”

‘I am continuing to see us near zero (on interest rate) through 2023,” Bullard said.

Fed Governor Lael Brainard said in a speech that the FOMC’s current approach implies “resolute patience while the gap closes between current conditions and the maximum-employment and average inflation outcomes in the guidance.”

The “preemptive approach” calls for reduction of accommodation when unemployment rate nears the estimated neutral rate, in anticipation of higher inflation risks. But the current “patient” approach enables “the labor market to continue to improve and inflation expectations to become re-anchored at 2 percent.”

While outlook has “brightened considerably”, the economy remains “far from our goals” with jobs nearly 10 million below pre-COVID level, and inflation persistently below 2%. “It will take some time to achieve substantial further progress,” she added.

Full speech here.

Dallas Fed President Robert Kaplan said in a CNBC interview said his economic forecast has “improved meaningfully”. He’s expecting 6.5% GDP growth this year while unemployment rate would fall back to 4.5%.

He will advocate for scaling back stimulus after “seeing real outcomes, not just forecasts”. But still, he’s forecast for removing accommodation is “more aggressive than the median Fed official. He’s expecting Fed to start hiking interest rates in 2022.

Fed Governor Michelle Bowman warned in a speech that “financial pressures on many small businesses remain acute”. She’s concerned that “a growing number of small businesses have already been closed permanently or are on the verge of failure”.

While the pandemic restrictions may have been helpful, she said, “they appear to have disproportionately impeded small firms’ ability to maintain their operations and revenue sources, leading to substantial cash-flow pressures.” The restrictions “came at a very high economic cost,” she added.

“My FOMC colleagues and I expect to maintain an accommodative stance of monetary policy until employment and inflation achieve levels consistent with our maximum employment and inflation goals,” she concluded. “At this point, the economy is still a long way from those goals. We are making progress, but I think it will take some time for us to get there.”

Full speech here.

In the remarks prepared for a Congressional testimony on Tuesday, Fed Chair Jerome Powell said, “indicators of economic activity and employment have turned up recently.” As with overall economic activity, “conditions in the labor market have recently improved”. The recovery has “progressed more quickly” than generally expected and looks to “strengthening”.

Nevertheless, “the sectors of the economy most adversely affected by the resurgence of the virus, and by greater social distancing, remain weak,” he added. “And the unemployment rate—still elevated at 6.2 percent—underestimates the shortfall, particularly as labor market participation remains notably below pre-pandemic levels.”

“We are committed to using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible on behalf of communities, families, and businesses across the country,” Powell reiterated.

Full remarks here.