Comments from Fed officials yesterday generally suggested that interest rates are currently at the right place. There won’t be further rate cut unless outlook worsens materially.

St. Louis Fed President James Bullard said that the current 2020 baseline outlook suggests reasonable chance of “soft landing”. While growth is expected to slow, US is not facing a “sharper than anticipated” collapse. The three rate cuts in 2019 were “a substantial move”. “Now we should wait and see what the effects are in the first half of 2020 and beyond that,”

Minneapolis Fed President Neel Kashkari said that “trade tensions with China don’t seem to be increasing, so that’s a positive.” That could “translate into more business investment”. He added that Fed’s rate cuts have “taken some of the recession risk off the table.””We think inflation is around the corner and then inflation doesn’t come because we raise rates prematurely,” he said. “Now that we’re in a pause mode I think we’re in a much better position.”

Chicago Fed President Charles Evans said “I see the fundamentals as pretty good.” “If something were to happen that caused the economy to slow down and perhaps do worse than that then that would call for some type of response on the downward fashion. But I’m not expecting that”.

Dallas Fed President Robert Kaplan said federal funds rate at 1.50-1.75% is “a roughly appropriate setting.” GDP is expected to grow about 2% to 2.25% this year, “and if anything my growth outlook has firmed a bit in the last several weeks.” He also backed the view that rates should stay at current level unless there is “material” change in the outlook.

Fed Vice Chair Richard Clarida said the US economy begins 2020 “in a good place”. PCE price inflation is “running somewhat below” the 2% target. But Fed projects that inflation will “rise gradually” back to the 2% symmetric objective. Meanwhile, there is no evidence that a strong labor market is “putting excessive cost-push pressure on price inflation”.

Over the course of 2019, FOMC shifted the monetary stance to “offset some significant global growth headwinds and global disinflationary pressures.” Such shift was “well timed” and has helped keep the outlook on track. ” As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy likely will remain appropriate.”

Monetary policy is “not on a preset course”, he added. “if developments emerge that, in the future, trigger a material reassessment of our outlook, we will respond accordingly.

Clarida’s full speech here.