No Rush To Cuts For Tuesday's FOMC Speakers

Tuesday's busy slate of FOMC commentary reinforced a theme from last week's meeting: despite the more encouraging inflation data of late, policymakers are not in a rush to cut rates. Some of the key comments from FOMC participants who were speaking on monetary policy for the first time since the pre-June media blackout:

• Boston Fed President Collins noted in a speech that while April-May inflation data is "promising", "it is too soon to determine whether inflation is durably on a path back to the 2 percent target....we should not overreact to a month or two of promising news, just as it was not appropriate to take too much signal from the disappointing data at the beginning of this year....the appropriate approach to monetary policy continues to require patience, providing time for a methodical and holistic assessment of the evolving constellation of available data."
• Richmond Fed President Barkin told an MNI Webcast that while the US economy was "clearly on the back side of inflation," with May's inflation data "very encouraging", he can envisage multiple scenarios for monetary policy depending on how the data evolves and "we will learn a lot more over the next several months".
• NY Fed President Williams likewise was non-committal on rate cuts, saying he wouldn't make a "prediction" about the path of policy, as it "depends on how the data evolves...I do see a disinflationary process continuing and I expect inflation to keep coming down the second half of this year and next year.”
• Fed Governor Kugler: While "I was encouraged by some of the details of the recent reports", "inflation is still too high, and further progress is likely to be gradual". But "I am optimistic about further progress...if the economy evolves as I am expecting, it will likely become appropriate to begin easing policy sometime later this year" but "as always, my judgment will be guided by the data."
• Dallas Fed Pres Logan eyes "several months" of data before having the confidence to cut: “we’re in a flexible position to watch the data and be patient...we’re going to need to see several months of that data to really have confidence in our outlook that we’re headed to 2%.”
• St Louis Fed President Musalem provided arguably the most hawkish perspective today, speaking of "quarters" rather than "months": "I will need to observe a period of favorable inflation, moderating demand and expanding supply before becoming confident that a reduction in the target range for the federal funds rate is appropriate. These conditions could take months, and more likely quarters to play out."