Richmond Fed President Thomas Barkin said in an interview yesterday, “I’m very supportive of a (tightening) path that is slower, probably longer and potentially higher than where we were before.”

“It is helpful to be somewhat more cautious as you are in restrictive territory,” he said. “It is a better risk-management approach.”

“Inflation has been stubborner than I would like,” he said. “As long as inflation stays elevated, that makes the case to me that we need to do more.”

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.”

In the highly anticipated Jackson Hole speech, Fed Chair Jerome Powell noted that the three weeks since July FOMC meeting “have been eventful”. There were new tariffs on Chinese imports, further evidence in global slowdown notably in Germany and China. Also, there were geopolitical events including “growing possibility of a hard Brexit, rising tensions in Hong Kong, and the dissolution of the Italian government.”

Though, US economy has “continued to perform well overall, driven by consumer spending”. Job creation slowed but is “still above overall labor force growth”. Inflation seems to be “moving up closer to 2%. Powell pledged, “based on our assessment of the implications of these developments, we will act as appropriate.

Dollar dips mildly after the release but overall, downside is limited for the moment.

Powell’s full speech here.

Fed Vice Chair Richard Clarida said in a Bloomberg TV interview that there is a lot of “pent-demand” as well as “pent-up supply” in the economy. Both supply and demand will be in play as the year progresses. The “baseline expectation” is that most of the early rise in inflation this year will “revert by year-end”.

“If inflation at the end of the year has not declined from where it is at the middle of the year might be ‘good evidence’ of inflation that is not transitory,” he added.

Also, Clarida reiterated that “substantial progress is actual progress.” Fed will inform the public about the progresses “as we go through the year”. “We will have ample opportunities as data comes in to inform Fed observers on our progress”, he said.

Cleveland Fed President Loretta Mester said, “I would like to see financial stability considerations explicitly incorporated into the monetary policy framework, with an acknowledgment that nonconventional monetary policy has the potential to increase the risks to financial stability.”

“Monetary policymakers need to be clear-eyed that the actions they take to achieve monetary policy goals, while most often complementary to fostering financial stability, can at times contribute to financial stability risks that could jeopardize the achievement of monetary policy goals over time,” she warned.

Nevertheless, she added, “I don’t think we’re at that level where we’re facing that tradeoff between, you know, macro policy tools needing to be dialed back because of financial stability risks.”

San Francisco Fed President Mary Daly echoed the rhetorics of her FOMC colleagues, and said, “we won’t be preemptively taking the punchbowl away from the economy”.

Instead, “we want to discipline ourselves here and not get overly joyous that the unemployment rate is coming down, while so many other measures of labor-market activity remain well below pre-pandemic levels, still needing to recover,” she deed.

“So what you’re going to see in our framework is a good, healthy, and I think appropriate, dose of patience.”