So why, then, did I think it appropriate not to raise rates in June? The reason was timing. There was considerable uncertainty about the outcome of the upcoming U.K. referendum on membership in the European Union. The vote was being held a week after the June FOMC meeting. It was clear there was going to be volatility in financial markets surrounding the vote. If the vote favored exit, there was the potential for disruption in markets. Given that I do not think U.S. monetary policy is behind the curve yet, I saw little cost in waiting to take the next step.

Proceeding cautiously in raising the federal funds rate will allow us to keep the monetary support to economic growth in place while we assess whether growth is returning to a moderate pace, whether the labor market will strengthen further, and whether inflation will continue to make progress toward our 2 percent objective.

In response to a question about whether the decision to not refer to a rate hike “in coming months” in early June was a deliberate omission.

You know, we do need to make sure that there is sufficient momentum. I don't know what the timetable is going to be to gain that assurance.

Every meeting is live. There is no meeting that is off the table, no meeting is out in terms of a possible rate increase.

But we really need to look at the data. And I can't pre-specify a timetable. So, I'm not comfortable saying it's in the next meeting or two.

But it could be. It could be. It's not impossible. It's not impossible, I think by July, for example, that we would see data that led us to believe that we're on a perfectly fine course and that data was an aberration and other concerns would have passed.

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Look, if the incoming data were in the coming months to justify the kind of gradual increases that we have long discussed that we see is appropriate in light of the outlook, I think markets should not be surprised by such a decision if we make it, and it's obviously consistent with the data that we have seen. And the committee will feel free to move in the coming months if we think it's appropriate

I continue to believe that it will be appropriate to gradually reduce the degree of monetary policy accommodation, provided that labor market conditions strengthen further and inflation continues to make progress toward our 2 percent objective. Because monetary policy affects the economy with a lag, steps to withdraw this monetary accommodation ought to be initiated before the FOMC's goals are fully reached.

My message will be largely favorable, although recent developments have been mixed… The news from the labor market over the past year has been generally good…At the same time, recent signs of a slowdown in job creation bear close watching.

If incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2 percent objective, as I expect, further gradual increases in the federal funds rate are likely to be appropriate and most conducive to meeting and maintaining those objectives. However, I will emphasize that monetary policy is not on a preset course and significant shifts in the outlook for the economy would necessitate corresponding shifts in the appropriate path of policy.

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Business investment has been weak in the past six months or so… I suspect there is a transitory element to this weak investment performance, and I expect investment to rebound. But the latest labor market data raise the less favorable possibility that firms may instead have decided to expand their operations more slowly, and I intend to continue to pay close attention to developments in this area.

Two rate hikes in 2016, that's my own call for that, if the data continue to be in line with my outlook, that's a slow and gradual increase this year.
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Timing's not really that important, you mentioned possibly two summer hikes, that would be a little bit more than I'd say is ... priced in to the dots certainly and the market expectations.

It’s likely the data will have improved enough to boost rates at either the June or July central-bank policy meetings, Mr. Kaplan said.

The second approach [to Fed policy], which I’ve been a little bit more inclined towards, is to say, "Gee, you know, it’s not clear what full employment is, we’re in a global environment which is not inflationary, and we can perhaps get some more employment and some higher wages"... Are we at a point where there’s an affirmative reason to move?

Meanwhile, Bullard noted he had been critical of the Fed's "dot plot" summaries of policymakers rate outlooks recently, saying they may be giving too much forward guidance, removing the Fed's ability to make data-dependent decisions.

The economy is continuing to improve. We saw weak growth in the first quarter and relatively weak growth at the end of last year. Growth looks to be picking up from the various data that we monitor, and if that continues and if the labor market continues to improve, and I expect those things will occur, we’ll continue to monitor incoming data and also we’ll assess risks to the outlook.

But it's appropriate, and I've said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate.

"If economic data keeps going the way it is, I've said I will advocate for an increase in the near future," Kaplan told reporters after a public appearance here. "That may not be June or July, My approach is take one meeting at a time."

Kaplan added that his economic outlook, as formulated and submitted to his colleagues in March, is "consistent" with two rate hikes this year. That view puts him in agreement with the majority of his fellow policymakers.

"[Brexit] is a factor in the decision for June obviously because you have an event right after, and we can obviously hold off until July if we wanted," Williams, speaking to reporters here, said of raising rates at the next two policy meetings.

"But of course we could also make a decision to raise rates at a meeting and if later on economic conditions for the U.S. change, we can always move interest rates back down," said Williams, an influential centrist who does not have a vote on policy this year.

It is quite reasonable that we will get close to the 2 per cent target on the current path that we are on. The economy is improving but at a relatively slow rate. The inflation rate has been improving but at a very slow rate as well. So I think we are on the right path. It is not obvious to me right now that we are necessarily going to overshoot.

But one of the things that I highlighted in that New Hampshire talk is that [there are] both benefits and costs for waiting. The benefits tend to be accruing to the labour market and hopefully getting labour force participation to improve...

But there are also some potential costs. We talked about one, which is financial stability. A second one is that in the past we have tended to overshoot the natural rate of employment and when we overshoot significantly on the natural rate of unemployment it takes a while for the inflationary pressures to pick up but we are not so good at slowing down the economy and getting right at the NAIRU.

So if you look at the unemployment rate curve you tend to blow through the natural rate and when you start tightening you tend to get a recession shading. So it tends to be much more abrupt than we were hoping. Which means we are not like a thermostat where you can easily calibrate the difference between 70 degrees and 68 degrees . . . When we start tightening we tend to get more of a reaction in the economy than we are hoping for.

So it makes me a little tentative to hope we would overshoot significantly, because I am not so sure we are good at fine-tuning the economy. History would say we haven’t. Ideally what you would see is long periods where we are around the estimates of full employment. That is not actually what you see.

I would say that most of the [tightening] conditions that were laid out in the minutes as of right now seem to be . . . on the verge of broadly being met.I think the Federal Reserve minutes were pretty clear that a number of conditions would be necessary but if those conditions were met it would be appropriate to raise rates. One of the conditions was economic growth picking up in the second quarter. Given that real GDP was only a half a per cent in the first quarter that is a relatively low threshold. If you look at how the data has actually been coming in I was a little surprised that there was not more of a market reaction to the very strong retail sales for April. If you look at the economic forecasters in the private sector most of them have raised their consumption forecasts for the second quarter to be in the range of 3 per cent to 3.5 per cent. When consumption is roughly two-thirds of GDP, a number that high for that major a component means that it is likely we will see growth around 2 per cent.
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The second condition was labour markets continuing to strengthen. While the payrolls number was a little lower than market expectations it is still consistent with a gradually tightening labour market. 160,000 jobs is well above what we are going to need in order to take into account new workers coming into the labour force. If we were to continue to get 160,000 jobs [a month] it is less than what we were getting in the first quarter of a little bit above 200,000, but it is well above what we need to have a gradual tightening of labour markets.
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We are still a month away from the actual meeting. We are going to get another employment rate in early June. We are going to get a second retail sales report. So I want to be sensitive to how the data comes in, but I would say that most of the conditions that were laid out in the minutes as of right now seem to be . . . on the verge of broadly being met. We have more data to observe before we actually go into the meeting. If we were to get a lot of weak data between now and when the meeting occurs that would obviously influence how I was seeing the economy. Just focused so far on what we have seen to date since the last FOMC meeting, and broadly all that data has been pretty supportive of the criteria that were laid out in the minutes.

I think the [April] minutes did a good job of conveying the breadth of expectation within the committee about what they would be likely to favor doing in June given the data coming in as expected. I thought that passage was clear. I thought it was accurate.

I thought it was a good reflection of the extent to which, yes, I think if we did come in with data that along the lines we're expecting a pickup of growth in the second quarter, inflation kind of remaining where it is now, or maybe advancing further towards two percent measured by the PCE index, I think the case should be very strong for raising rates in June as well.