Chicago Fed President Charles Evans said yesterday that inflation has to “cross over, beyond 2%, with some momentum”. He’d be “quite pleased” if Fed could get core inflation up to “2.5%” for a time.

He expects inflation to “slowly improve, reaching 2% on a persistent basis in 2023 and then moderately overshooting 2% over the following few years”. He didn’t expect unemployment to come back to 4% until 2023.

“My forecast assumes that additional federal fiscal policy actions are coming,” Evans added. “Without adequate fiscal support before too long, I am concerned that recessionary dynamics will gain more traction and lead to a slower trajectory back to maximum employment.”

St. Louis Fed President James Bullard said, “even under these generous assumptions, the policy rate is not yet in a zone that may be considered sufficiently restrictive”. And, “to attain a sufficiently restrictive level, the policy rate will need to be increased further.”

“Thus far, the change in the monetary-policy stance appears to have had only limited effects on observed inflation, but market pricing suggests disinflation is expected in 2023,” Bullard said.

Fed Vice Chair Randal Quarles said that the current high inflation was transitory, due to supply chain imbalances and higher demand. He said, “if a year from now we were not to see inflation settling back down to something that’s closer to our 2% target… we have the tools at the Fed to then begin – as we traditionally would – to increase interest rates, to change our monetary policy in a way that would address that inflation.” He noted that “we’re not behind the curve”.

Separately, Richmond Fed President Thomas Barkin said, “it’s pretty clear to me we have had substantial further progress against our inflation goal”. “I’m pretty optimistic about the labor market. … If the labor market opens as I suggested it might, then I think we’re going to get there in relatively short order.”

“I kind of think let’s look at it next year and see what happens and if the numbers hit, great, if they don’t, we’ve got time because it will show there’s still more time for the economy to grow,” Barkin said.