That said, policymakers remain concerned that progress on inflation could stall or even reverse. Two officials – Richmond Fed’s Thomas Barkin and Fed Governor Michelle Bowman – said as much, raising the possibility of additional hikes if inflation proves to be stubborn.

Kathy Jones, Charles Schwab’s chief fixed income strategist, doesn’t see Powell opening the door to rate cuts in the first quarter, noting he will will probably try to avoid providing any kind of time frame. “But he’ll probably reflect satisfaction with the way things are going – inflation is falling and unemployment is staying low.”

Here’s a summary of the key comments from Fed officials this week:

Governor Christopher Waller, 2023-24 voter
“If inflation’s coming down, once you get inflation down low enough, you don’t necessarily have to keep rates up at those levels... if we see this inflation continuing for several more months — I don’t know how long that might be, three months, four months, five months — that we feel confident that inflation is really down and on its way, that you can then start lowering the policy rate just because inflation’s lower.”

Governor Michelle Bowman, 2023-24 voter
“I remain willing to support raising the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or is insufficient to bring inflation down to 2% in a timely way.”

Cleveland Fed President Loretta Mester, 2024 voter
“Monetary policy is in a good place for policymakers to assess incoming information on the economy and financial conditions and judge whether policy is well calibrated to ensure that inflation is on a timely path back to 2%.”

New York Fed President John Williams, 2023-24 voter
Rates are “estimated to be the most restrictive in 25 years. I expect it will be appropriate to maintain a restrictive stance for quite some time to fully restore balance and to bring inflation back to our 2% longer-run goal on a sustained basis.”

Richmond Fed President Thomas Barkin, 2024 voter
“If inflation comes down naturally and smoothly, awesome. ... But if inflation is going to flare back up, I think you want to have the option of doing more on rates.”

Atlanta Fed President Raphael Bostic, 2024 voter
“I’m sensing greater clarity about a few important currents. One is the direction of inflation. There’s no question the rate of inflation has slowed materially over the past year-plus, and thus far we have avoided a disruptive surge in unemployment that often accompanies a steep slowdown in price increases.”

Chicago Fed President Austan Goolsbee, 2023 voter
“Overall, we have made progress on inflation outside of the food sector. It’s been coming down. It’s not yet down to target. But 2023, we’re on a path to set the highest drop in the inflation rate in 71 years.”