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.”

In a speech, Fed Governor Adriana Kugler acknowledged that while inflation remains too high, she is “encouraged” by the overall progress and outlook. Kugler expressed “cautious optimism” based on recent economic and inflation data, suggesting that Fed is on track towards its 2% inflation target.

She noted that progress may have stalled in the first quarter of the year, but subsequent information on economic activity, the labor market, and inflation indicates “renewed progress.”

Kugler indicated that, “If the economy evolves as I am expecting, it will likely become appropriate to begin easing policy sometime later this year.”

Full speech of Fed’s Kugler here.

In a moderated Q&A session overnight, Dallas Fed President Lorie Logan stated, “From a monetary policy perspective, we’re in a good position, we’re in a flexible position to watch the data and be patient.” She highlighted the need for “several months” of favorable data to gain confidence that inflation is on track to the 2% target.

Despite signs that the economy is balancing better, Logan expressed concerns about persistent upside risks to inflation. She also suggested that the neutral rate setting may now be higher than pre-pandemic levels.

“We’ve just been surprised by how well the economy has performed at these higher levels of rates,” she noted. Logan attributed this to structural changes in the economy, implying that the neutral rate might be higher than it was in the decade before the pandemic.

In his debut speech, St. Louis Federal Reserve President Alberto Musalem emphasized the need for sustained favorable conditions before considering a reduction in interest rate. He stated that he needs to see a period of favorable inflation, moderating demand, and expanding supply, which could take “months, and more likely quarters” to materialize.

He also did not rule out additional rate hikes if inflation remains significantly above 2% or if it reaccelerates, although he noted this was not his base case scenario.

Musalem also expressed uncertainty about whether the current monetary policy stance is sufficiently restrictive, pointing out that financial conditions “feel accommodative for some parts of the economy while restrictive for others.”

Richmond Fed President Thomas Barkin expressed optimism about the inflation outlook in an interview with MNI Webcast. Barkin noted that we are “on the back side of inflation,” indicating that inflationary pressures are easing.

He highlighted that the next several months will be critical in gaining more insights and that Fed is well-positioned from a policy standpoint to react and ease montary policy.

Barkin emphasized two key themes: “sustainment” and “broadening.”

Sustainment refers to maintaining a downward trend in both headline and core inflation, ensuring that it continues on a path towards 2% target. Broadening implies that this trend should be consistent across a wide range of goods and services in the inflation basket.

New York Fed President John Williams shared optimistic views on the US economy in an interview with FOX Business today. Williams highlighted encouraging signs that supply and demand are rebalancing, contributing to a “disinflationary process continuing.” He anticipates that inflation will keep decreasing throughout the second half of this year and into the next.

Williams expects interest rates to “come down gradually over the next couple of years” as inflation moves back towards the Fed’s 2% target and the economy follows a strong, sustainable path.

However, he refrained from specifying the timing of the first rate cut, stating, “I’m not going to make a prediction” about the exact path of policy.

Williams emphasized that future decisions will be data-dependent, noting, “I think that things are moving in the right direction” for eventual policy easing.

Philadelphia Fed President Patrick Harker indicated overnight that his base case scenario includes one interest rate cut by the end of the year, contingent on several more months of improving inflation data.

Harker emphasized the need for ongoing assessment, stating, “If all of it happens to be as forecasted, I think one rate cut would be appropriate by year’s end.”

However, he also left room for adjustments based on new economic data, noting, “I see two cuts, or none, for this year as quite possible if the data break one way or another…we will remain data dependent.”

Harker believes that the current policy interest rate, which has been steady for nearly 11 months, remains effective in maintaining restrictive conditions to bring inflation back to target and mitigate upside risks.

His outlook includes slowing but above-trend economic growth, a modest rise in the unemployment rate, and a gradual return to target inflation, which he describes as a “long glide.”

Minneapolis Fed President Neel Kashkari indicated in a CBS interview over the weekend that any interest rate cut is likely be towards the end of the year.

Kashkari emphasized the necessity of gathering “more evidence” to ensure inflation is on a downward trend toward Fed’s target of 2%.

“We’re in a very good position right now to take our time, get more inflation data, get more data on the economy, on the labor market, before we have to make any decisions on cutting interest rateshe added.

If a rate cut is to occur, it would likely be towards the end of the year, aligning with the median forecast.