[T]he Committee expects that the federal funds rate is likely to remain, for some time, below the levels that are expected to prevail in the longer run because headwinds--which include restraint on U.S. economic activity from economic and financial developments abroad, subdued household formation, and meager productivity growth--mean that the interest rate needed to keep the economy operating near its potential is low by historical standards.

I think there is a residual seasonality problem. The first quarter has been weak for many years in a row. You’d like to see that shown in the data in a bounceback in second-quarter GDP growth, and we’re not really sure at this point what that’s going to come out to be. So we’ll have to get more data on the second quarter. Tracking estimates are a bit low right now for the second quarter.

The other thing that I find a bit concerning is that if you take the last four quarters, including the current quarter – put in a tracking estimate for the current quarter and then take the last three before that – you only get about 1.6 percent growth or something like that, depending on exactly what numbers you put in there. And that’s pretty low. That sounds like, you know, below most people’s – even pessimistic people’s estimates of trend.

Adding things up, I see growth in the U.S. recovering from the tepid first quarter and increasing in the range of 2 to 2-1/2 percent for the remainder of 2016 and in 2017. For reference, this pace is modestly stronger than my assessment of the underlying growth trend and should therefore support continued reduction in labor market slack.

I should note, though, that I see the balance of risks to this outlook as weighted to the downside. True, the solid labor market and continued low energy prices could lead to stronger household spending than expected — with attendant spillovers to other components of domestic demand. But the downside risks — notably that the international situation could deteriorate more than expected and related movements in the dollar and financial conditions could weigh more heavily on domestic spending — seem more likely to me. Also, I don’t see other sectors of spending picking up the slack if for some reason the U.S. consumer were to falter.

I'm sticking to the view that the remaining three quarters of the year will be much better than the first quarter. Therefore, the first quarter is an anomaly. Either it's statistical noise or it's just similar to the way we've seen first quarters in recent years.

Hays: You have a 2.5 — 2 to 2.5 percent GDP forecast.

Is there any concern on your part that the economy has stalled out a bit early in the year?

James Bullard: I wouldn’t be inclined to give it that interpretation at this point, especially with the fairly strong jobs reports that we’ve had. So probably it’s, again, residual uncertainty or residual seasonality in the — in the first quarter of the year, which we’ve seen quite a bit over the last 20 years and if it’s like past years, that will be made up, you know, in later quarters.

My baseline outlook has real gross domestic product (GDP) growing at a moderate 2 to 2-1/2 percent annual rate in 2016.

I see the economy on a growth track that should produce moderate growth this year—between 2 percent and 2 1/2 percent.

“Global growth has slowed” and China’s economy is moving to a slower pace, he said in a panel discussion in San Francisco. “We have a strong domestic economy and we can basically offset that. If it weren’t for these headwinds, the economy would easily be growing at 3 percent a year.”

When measured against [recent FOMC forecast] benchmarks, my forecast of GDP rising in the range of 2 to 2-1/2 percent in 2016 doesn’t look so bad. It’s simply saying that the economy will expand near its longer-run productive capabilities. This number may be disappointing — we would certainly like stronger sustainable growth — but there is nothing much that monetary policy can do about working-age population growth, labor force participation trends, and technical progress. These trend estimates are the benchmarks we must take as given when deciding how to set monetary policy.

I anticipate that growth over the fourth quarter of last year and through this year will be at an above-trend pace in the 2.5 to 2.75 percent range. My estimate of longer-run growth is 2.25 percent, which is at the upper end of the 1.8 percent to 2.3 percent range among FOMC participants.

And after the recession ended, that sense has led many forecasters, myself included, to predict repeatedly that growth was about to shift to a more robust pace. That just hasnt happened; weve seen short-lived surges in growth, only to see growth subside for the following couple of quarters. For example, real GDP surged over the second half of last year only to falter at the beginning of this year.

This experience has led me to conclude that a sustained increase in growth to something over 3 percent in the near future is unlikely. Given what we know, after more than five years of this expansion, it strikes me as more likely that growth will continue to average somewhere between 2 and 2 percent.