In a speech, Boston Fed President Susan Collins cautioned against overreacting to “a month or two” of improvements in inflation data. She emphasized, “It is too soon to determine whether inflation is durably on a path back to the 2% target.” Collins urged patience in the approach to monetary policy, reflecting the need for a cautious stance.

“In my view, the data suggest an economy with demand and supply coming into better balance, as required to restore price stability,” Collins said. “However, this process may just take more time than previously thought.”

Minneapolis Fed President Neel Kashkari said the US economy is “fundamentally healthy”. While “we at the Fed cannot control if Europe has a crisis, or if China has a hard landing”, “we can control our own mistakes”. He added that ” if we can avoid tapping the brakes prematurely, I think the expansion can continue.”

Kashkari also noted that”let’s let the economy continue to strengthen and if we see signs then, wages pick up, inflation picks up, we can always tap the brakes then; let’s just not tap the brakes prematurely.”

Richmond Fed President Tom Barkin said in a speech, while inflation has run below the 2% target it is “not that far-off target”. “With rounding, you could even call it on target.” The new framework allows “only a moderate” overshoot in inflation. “That moderation limits the risk of de-anchoring while sending a positive signal on inflation.”

He added that recent pick up in inflation is “just a natural rebound from a deflationary second quarter.”. While it’s possible that inflation could escalate in the near future, “I have to say I’m less worried about that possibility.” And, should inflation emerge, the Fed has the tools and the will to address it.”

Barkin’s full speech here.

Dallas Fed President Robert Kaplan said Fed officials are watching whether “decelerating global growth”, “weak manufacturing” and “weak business fixed investment” in the US would spreads through the rest of the economy. He added that if it spreads enough so that in six months there were a weak job report or two, “all of a sudden consumer confidence gets a little shaky, then you could have the start of a more severe downturn”.

And that’s why Fed lowered interest rate twice to a “little accommodative” level to support spending and investment and guard against a slowdown. He’s still comfortable that US is “not going to have a recession”, as long as consumers stay strong. At this point, Kaplan is “agnostic” about whether further rate cuts will be needed.

Fed Vice Chair Richard Clarida said price inflation appeared “less responsive to resource slack” in recent decades. A “flatter Phillips curve permits the Federal Reserve to support employment more aggressively during downturns”. But it also increases the cost of “reversing unwelcome increase in long-run inflation expectations.

He added that a “flatter Phillips curve makes it all the more important that inflation expectations remain anchored at levels consistent with our 2 percent inflation objective”. For now, based on the evidence reviewed, he judged that US inflation expectations “do reside in a range that I consider consistent with our price stability mandate”.

Clarida’s full speech here.

In an op-ed article published in the Financial Times, Minneapolis Fed President Neel Kashkari said Fed should use forward guidance now to stimulate the economy. He explained that “forward guidance can also provide stimulus by signalling that overnight rates will be low in the future.” That is, Fed can “influence long-term rates by giving guidance about the future path of their short-term equivalents. The firmer the Fed’s commitment, the more influence it can have.”

Kashkari added that “forward guidance should be used now, before the federal funds rate returns to zero.” He argued that “if a central bank cuts rates to zero in response to a downturn and then announces that it plans to keep rates low, that can actually be perceived as a sign of weakness rather than strength.” Instead, “it would be better to deploy guidance now in an effort to avoid hitting zero.

Regarding the guidance, he said “at a minimum, we should commit to not raising rates again until core inflation returns to our 2 per cent target on a sustained basis.”