I'm comfortable with rates where they are now, but later this year I think it will be a legitimate question about whether we drop ... the 'extended period' language and think about raising rates.

Asked if such conditions were robust enough to allow the Fed to alter its repeated commitment to keep borrowing costs at exceptionally low levels for an "extended period," Lacker said: "Not now. Maybe soon."

"I'm comfortable with rates low where they are right now," he said. "I think we're entering a period when, every quarter, it's going to be a legitimate question as to whether to raise rates or not."

Plosser told reporters he has been “uncomfortable with the ‘extended period’ language for some time.” The Federal Open Market Committee “has to be prepared to move when the time comes,” he says, and the “extended period” language should “not be perceived to stand in the way.”

“Even if the target was increased to 1 percent, policy would remain very accommodative,”

[With the extended period pledge having been removed,] the FOMC would be prepared to raise the funds rate target to 1% by the end of summer.

I continue to support the current stance of interest rate policy. But the time is approaching when it will be appropriate to consider recalibrating interest rate policy. I do not believe that time has yet arrived. The conditions that require a change of policy are not yet at hand. However, as the economy continues to improve and financial markets find firmer ground, extraordinarily low policy rates will not be needed to promote recovery and will become inconsistent with maintaining price stability.

The implication is that the policy rate may have to begin to rise even while unemployment is considerably higher than before the recession. I'm very concerned about unemployment, and certainly employment trends should be a critical consideration in setting policy. But I accept that good policy, even in circumstances of unacceptable levels of unemployment, may incorporate higher interest rates.

Coupled with the benign outlook for inflation, these headwinds to growth and employment explain why the Federal Reserve is keeping short-term interest rates unusually low. We want to do all we can to support more rapid economic and employment growth, subject to keeping inflation low and stable, and inflation expectations well anchored... But we are still far from where we want to be.

I think that most or maybe even all of the members of the FOMC and the other presidents agree that current conditions necessitate interest rates near zero. However, the sentence goes on to forecast that these kinds of economic conditions are likely to continue for “an extended period.” There has been some public disagreement about this forecast, and it is one reason given by the president of the Federal Reserve Bank of Kansas City for his dissenting from the statement at the last three meetings.

As for my own view, had I been a voter, I would have voted in favor of the FOMC statement in April. I do think that readers of the FOMC statement should pay very careful attention to its explicit conditionality. The statement says that the committee will raise interest rates if economic conditions change appropriately—whether that’s in three weeks, three months, or three years.

[The "extended period" language is] there, we'll deal with it as appropriate at the right time... It's a question of when the conditions are proper for beginning to signal that we are going to be tightening monetary policy, and I don't think we are there yet.

At its last meeting, the U.S. central bank reiterated its pledge to keep interest rates extraordinarily low for an extended period. Lacker said he was still "marginally comfortable" with that pledge.

I've said 3 to 4 meetings, six months, [for the likely duration of the "extended period" language] depending on circumstances changing in a big way. Everytime we get to the point where we make a decision like that I look forward and go, 'I think we still need accommodative policy for some time.'

I don't look at it in terms of what that means 18 months ahead because I don't think that's essential for the current policy forward language," he added.

The Federal Open Market Committee, last month repeated its statement that it expects low interest rates to continue for an extended period. I agree with this assessment. At some point though, as the economy continues to expand, the Fed will have to pull back some of this extraordinary stimulus.

The FOMC has stated clearly that they currently anticipate that very low, extremely low rates will be needed for an extended period. They have emphasized however that that projection, that forecast, is conditional on three sets of conditions.

One, very low resource utilization -- high unemployment, low- capacity utilization; second, subdued inflation trends -- low inflation; and third, stabilization expectations.

So if those conditions cease to hold, and we anticipate changes in the outlook, then of course we will respond to that. But the committee, at its last meeting, issued a statement reiterating that expectation about interest rates.

'A couple of months ago, I was saying I was comfortable with the extended period language,' he told reporters after a speech.  'The recent data has made me think that it might be sooner rather than later that we would move that language. It depends on more data coming in,' he said.

As reported by Reuters

Last month, Fed officials reiterated a pledge to keep rates very low for an “extended period,” citing employers’ reluctance to add jobs and depressed home building.

“I think the recent data has made me think that it might be sooner rather than later that we remove that language” on the duration of low rates, Lacker said to reporters after the speech, without specifying the data. “I’m not there yet.”

As reported by Bloomberg

I can be reasonably certain of only one point: My economic forecast is highly likely to be wrong--but I don't know how. One implication of this pervasive uncertainty is that any statement about the future path of monetary policy must be conditional--dependent on the economy following the expected path. Although the FOMC has stated that the federal funds rate is likely to remain exceptionally low for an extended period, this statement explicitly depends on an economic outlook similar to the one I have given today. We cannot provide a precise timetable for when short-term interest rates will begin to return to normal because that depends on the evolution of actual and projected activity and inflation.

One implication of this pervasive uncertainty is that any statement about the future path of monetary policy must be conditional--dependent on the economy following the expected path. Although the FOMC has stated that the federal funds rate is likely to remain exceptionally low for an extended period, this statement explicitly depends on an economic outlook similar to the one I have given today. We cannot provide a precise timetable for when short-term interest rates will begin to return to normal because that depends on the evolution of actual and projected activity and inflation.

In my experience, these and other considerations put a premium on flexibility. The need to learn from and respond to news means that policy should have a substantial discretionary component. We have certainly needed to innovate over the past several years to contain the damage from unprecedented events in financial markets. But discretion has its limits as well. We must be able to explain and justify our actions within a coherent framework--even if the elements of that framework are adjusted from time to time as experience dictates. And to the extent that we can act predictably, households and businesses will be able to anticipate our actions, reinforcing their effects. Finally, we must not be flexible about our objectives. The goals of monetary policy--price stability and maximum employment--are stable and well known. The flexibility relates to the actions we take to get there.

By itself,the current state of the economy warrants an accomodative monetary policy. However, as the economy continues to improve, risks emerge around the act of holidng rates low for an extended period.

I have dissented at the last two FOMC meetings specifically because I believe the "extended period" language is no longer warranted and I am concerned about the buildup of financial imbalances creating long-run risks.