In a speech overnight, Fed Governor Michelle Bowman asserted, “I continue to expect that we will need to increase the federal funds rate further to bring inflation down to our 2% target in a timely way.”

She acknowledged that interest rates “appears to be restrictive” while financial conditions “have tightened since September”. However, “We don’t yet know the effects of tightened financial conditions on economic activity and inflation, she cautioned.

“There is an unusually high level of uncertainty regarding the economy and my own economic outlook, especially considering recent surprises in the data, data revisions, and ongoing geopolitical risks,” she noted.

Full speech of Fed Bowman here.

At a Fed conference overnight, Dallas Fed President Lorie Logan said that inflation appears to be “trending toward 3%”, a figure still above the 2% target.

Despite a cooling labor market, Logan highlighted that it remains “too tight,” implying that the job market’s strength could continue to put upward pressure on wages and, consequently, inflation.

Logan emphasized the need “see tight financial conditions in order to bring inflation to 2% in a timely and sustainable way”. She will be looking at “data” and “financial conditions” as the next meeting in December approaches.

With a particular focus on recent retracement in 10-year Treasury yield and broader financial conditions, Logan suggests these elements will play a pivotal role in shaping Fed’s forthcoming monetary policy decisions.

Chicago Fed President Austan Goolsbee, in recent comments to CNBC, noted that the job market is “getting into better balance,” a sign that the central bank’s policies may be having the desired effect without tipping the economy into a sharp downturn.

The Chicago Fed head also mentioned the need for a shift in focus from the height of rate hikes to the duration for which these elevated rates might need to be maintained.

“As long as we’re making progress,” he remarked, “the moment of arguing how high should the rate go is going to fade to how long should we keep rates at this level as inflation is coming down.”

In a recent interview with Bloomberg TV, Minneapolis Fed President Neel Kashkari underscored Fed’s commitment to reining in inflation, stressing the importance of reducing the inflation rate to Fed’s target of 2% over a “reasonable period of time.”

However, he also candidly expressed that the exact measures required to achieve this goal are still uncertain, as the economic response will guide future actions.

“We have to get inflation back down to 2% over a reasonable period of time,” Kashkari stated, adding, “Ultimately, the economy will tell us how much is needed to get there. And I just don’t know.”

Kashkari’s remarks come at a time when the economy is displaying resilience in the face of aggressive monetary tightening, with economic indicators not showing signs of significant weakening. “I’m not seeing a lot of evidence that the economy is weakening,”

Despite Fed’s aggressive rate hikes aimed at cooling inflation, Kashkari emphasized that policymakers have not declared victory yet. The fight against inflation is ongoing, and Fed is prepared to implement additional tightening measures if they are deemed necessary.

Minneapolis Federal Reserve President Neel Kashkari expressed concern over the consequences of insufficient tightening in a WSJ interview, saying, “Under-tightening will not get us back to 2% in a reasonable time.” He favored a stance that leans toward an aggressive policy rather than a cautious one.

In a subsequent conversation with Fox News, Kashkari drew attention to the economy’s endurance despite Fed’s recent rounds of rate increases. “The economy has proved to be really resilient even though we’ve raised interest rates a lot over the past couple of years. That’s good news,” he said. This resilience suggests that the economy might be better positioned to handle further rate hikes, should they be deemed necessary.

However, Kashkari was clear that the Fed’s job is far from over, as inflation remains a critical challenge. “We need to let the data keep coming to us to see if we really have got the inflation genie back in the bottle so to speak,” he conveyed, emphasizing the need for ongoing vigilance. He added, “We haven’t completely solved the inflation problem. We still have more work ahead of us to get it done.”