Fed Speak: Comments From FOMC Members on Rates, Inflation

     WASHINGTON (MNI) - The following is a summary of significant policy

comments from members of the Federal Reserve's policymaking Federal Open Market

Committee since their last meeting July 25-26.

     NOTE: * denotes member is an FOMC voter in 2017. ** denotes comment made

exclusively to MNI. 

     INTEREST RATES

     William Dudley (New York*): "I think it's too soon to judge exactly the

timing of when the next rate hike might occur. But I think the path is still

clear that short-term rates are going to move gradually higher over time."

(Sept. 8)

     Esther George (Kansas City): "It is time to continue to move that interest

rate higher. It is not an attempt to tighten or slow down the economy." (Sept.

7)

     Loretta Mester (Cleveland): "I am comfortable raising rates again this

year," and "if the economy keeps evolving the way I anticipate it wouldn't be a

surprise." (Sept. 7)

     Lael Brainard (Governor*): If inflation evolves as "many forecasters

assume," if the current shortfall from the 2% proves transitory, "further

gradual increases in the federal funds rate would be warranted, perhaps along

the lines of the median projection from the most recent SEP." (Sept. 5)

     Neel Kashkari (Minneapolis*): "Until we see inflation start climbing back

towards target, we might as well bring as many people back to the job market as

possible" by leaving interest rates where they are. (Sept. 5)

     Jerome Powell (Governor*): "You would have expected given that we're

getting tighter labor markets that we'd have a little higher inflation. I think

that what that gives us is the ability to be patient." (Aug. 25)

     Robert Kaplan (Dallas*): "I'm not saying I won't be in favor of raising

rates before the end of the year. I think we have the ability to be patient, and

I want to see more information that suggests we're making progress toward

meeting our 2% inflation objective." (Aug. 25)

     Charles Evans (Chicago*): "As long as it's still a reasonable proposition

that the inflation outlook is headed back for 2% -- I still think that's the

case -- then I think we can continue to follow through on our gradual policy

adjustment process. I think that's completely reasonable." (Aug. 9)

     James Bullard (St. Louis**): "Given the inflation outlook, which has

deteriorated in 2017, I would not support further moves in the near term." (Aug.

2)

     John Williams (San Francisco): "Maybe one more increase this year,

something like three increases next year is appropriate given that our labor

market is as strong as it is, given I expect inflation to be moving back to 2%."

(Aug. 2)

     Eric Rosengren (Boston): "As long as the labor markets are continuing to

tighten, I think we should be removing accommodation slowly. And I think we've

been fortunate that inflation numbers have been low enough that we could remove

the accommodation slowly." (Aug. 2)

     INFLATION

     Dudley (New York*): "With inflation below our 2% objective, I think it

allows us to be a little more patient." (Sept. 8)

     George (Kansas City): "Low inflation is actually helpful in many respects

to consumers it adds to purchasing power." (Sept. 7)

     Mester (Cleveland): "My projection is still that inflation is going to rise

to 2% gradually over time, and in that case, I think this gradual path that

we've been talking about for quite a long time is the appropriate path." (Sept.

7)

     Brainard (Governor*): "The recent low readings for inflation may be driven

by depressed underlying inflation, which would imply a more persistent shortfall

in inflation from our objective. In that case, it would be prudent to raise the

federal funds rate more gradually." (Sept. 5)

     Kashkari (Minneapolis*): "We at the Fed may have allowed inflation

expectations to drift lower" by treating the inflation target as a ceiling.

(Sept. 5)

     Powell (Governor*): "Inflation is a little bit below target, and it's kind

of a mystery." (Aug. 25)

     Kaplan (Dallas*): "We're obviously not meeting our inflation target." (Aug.

25)

     Fischer (Governor*): "This continuation of lower than expected inflation

rates is something we have to think about." (Aug. 16)

     Evans (Chicago*): "I think the inflation data has been sufficiently

unusual" that the factors weighing on inflation "would be expected to be one off

and temporary and recede." (Aug. 9)

     Williams (San Francisco): I'm "getting a little frustrated with inflation

refusing to come up to 2% as quickly as hoped. Still I think underlying

inflation trends are positive." (Aug. 2)

     Bullard (St. Louis**): "Expected inflation measures have deteriorated

during the first half of 2017 broadly speaking, and since that's a primary

determinant of actual inflation, it would not bode well for whether we can hit

the inflation target this year or further in the future." (Aug. 2)

     Rosengren (Boston): "There have definitely been a number of factors over

the last six months that have resulted in softer inflation numbers. Some of them

are idiosyncratic. ... But there are also some longer-run trends that I actually

think over time are going to push the inflation back up to 2%, and those

longer-run trends are basically that we're seeing a tightening in the labor

market." (Aug. 2)

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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