The process of normalizing policy, even once it begins, will still leave unprecedented policy accommodation on the table... The FOMC may not be willing or able to wait until all global uncertainties are resolved to begin normalizing policy.

“We are still feeding the fire at this moment, so I think we have to start thinking about turning this around in the near future,” Bullard told reporters while attending a financial conference in Prague today. “If the economy is as strong as I think and hope it will be in 2011, I think it will be time for us to start to reverse our ultra-aggressive and ultra-easy monetary policy.”

If uncertainties in the global economy are resolved, “we could pull up a little bit shy of our total of $600 billion,” he said. “I think it could be on the order of $100 billion less than what we initially thought.”

While, the goal in the long run is to achieve fiscal sustainability, "the first thing we should be doing is trying to get the slack out of the economy ... we need to be careful not to go the austerity route too quickly," Rosengren said.

“It could be that $600 billion is just about the right number,” Evans said to reporters before a speech in Columbia, South Carolina. “I won’t be surprised if that in fact is the decision. I still think it is a high hurdle to stop short of $600 billion. So far I haven’t seen it."

While short-term measures of inflation have accelerated in the last few months, I hold to the view that this trajectory will not continue. I continue to see the Federal Reserve's inflation objective I just outlined as attainable.

That said, like my colleagues on the FOMC, I continuously monitor performance against our price stability objective. This involves monitoring not just inflation today but importantly the course of inflation expectations, whether derived from surveys or pulled from financial market prices. I am prepared to support a change of policy if evidence accumulates that the low and stable inflation objective is at risk.

[L]ke my colleagues on the FOMC, I continuously monitor performance against our price stability objective. This involves monitoring not just inflation today but importantly the course of inflation expectations, whether derived from surveys or pulled from financial market prices. I am prepared to support a change of policy if evidence accumulates that the low and stable inflation objective is at risk.

No amount of forthcoming accommodation... will help the process which is afflicting the United States right now and may well make it worse. The problem afflicting the United States right now is that Americans are out of work.

We’ve made a commitment to have a certain stock of purchases to be completed by June. I view the bar for not completing those purchases as being extremely high.

Fisher said he is "beginning to see signs of speculative excess" in the U.S., evidenced in the "fresh flow of money" into the stock market, a surge in so-called covenant-lite loans and the re-leveraging by private equity firms.   "There’s lots of liquidity sloshing around the U.S. financial system," Fisher said. "We are seeing signs of all the intoxication that typically takes place when we have the ambrosia of cheap and readily available capital."

.....

"No further accommodation is needed after June," including by tapering the central bank’s purchases, the regional bank chief, who votes on monetary policy this year, said in a speech today in Frankfurt. "Doing so would only prolong the injustice that we have inflicted" on savers through inflation, he said.

As reported by Bloomberg News

It is important to emphasize that we at the Federal Reserve have been expecting the economy to strengthen. We provided additional monetary policy stimulus via the asset purchase program to help ensure that the recovery regained momentum. A stronger recovery with more rapid progress toward our dual mandate objectives is what we have been seeking. This is welcome and not a reason to reverse course.

Indeed, as a voting member of the FOMC this year, I have made clear within the meeting room and in public speeches that, barring some frightful development, I will vote against any program that might seek to extend or enlarge the substantial monetary accommodation we already have provided, just as I argued against the $600 billion extension the voters on the Committee approved last November. And I remain doubtful enough as to its efficacy that if at any time between now and June, it should prove demonstrably counterproductive, I will vote to curtail or perhaps discontinue it. As I said, the liquidity tanks are full, if not brimming over. The Fed has done its job. What is needed now is for business to be incentivized to commit that liquidity to creating American jobs. This is the task of the fiscal authorities, not the Federal Reserve.

With the information I have today, my first inclination is to be very cautious about extending asset purchases after June. Given the emergence of new risks, however, I prefer a posture of flexibility as regards policy options. As we have seen, conditions can change rapidly, so I will continue to evaluate the incoming information as much as possible with fresh eyes as I approach each meeting and each decision.

I conclude that the current accommodative stance of monetary policy is appropriate. However, the Federal Open Market Committee will need to remain vigilant to the possibility of changes in the gap between the unemployment rate and [the natural jobless rate].

Lockhart said it would be “wise” to complete the Fed’s planned $600 billion of asset purchases as scheduled under the program aimed at boosting U.S. growth.

REP. HENSARLING: As I looked in your testimony, I'm not sure you directly address the timing of the end of QE2, besides its natural termination in June. Today, do you -- are there any conditions that you see that you would anticipate a QE3?

MR. BERNANKE: Congressman, that has to be a decision of the committee and it depends, again, on our mandate. What we'd like to see is a sustainable recovery. We don't want to see the economy falling back into a double-dip or do a stall-out. And obviously, we're looking very closely at inflation -- both in terms of too low and too high.
And so I want to be sure that you understand that I am -- I am very attention to inflation and the potential risks for inflation and that will certainly be a major consideration as we look to determine how to manage this policy.