“I believe monetary accommodation is still called for, but I do not believe it should be as accommodative or aggressive as it was at the height of the crisis, when unemployment was over 10 percent and inflation was just 1 percent,” said Plosser, who doesn’t vote on the FOMC this year. “Current conditions do not warrant further accommodation.”

When asked whether the central bank planned a third round of bond-buying to boost the economy, Bernanke said the Fed was prepared to respond to “however the economy evolves” and hadn’t ruled out any options.

“I am personally not arguing at the table or publicly that we should be tightening right now,” Fisher told reporters after his speech today. “Before you tighten you have to stop accommodating and I don’t believe we need further accommodation.”

If real GDP does not grow more rapidly and unemployment remains at its current unacceptably high level, monetary policy may need to be more accommodative. The U.S. unemployment rate remains well above a level that could be considered full employment, while we are likely to undershoot our inflation targets.

"I think QE3 would require the economy to deteriorate somewhat from where it is right now," Bullard said. "The basic story on the U.S. economy is that we've had good news over the last six months or so, especially compared to the recession scenario that was being painted in the August-September time period of last year."

Notably, an examination of recent deviations from Okun's law suggests that the recent decline in the unemployment rate may reflect, at least in part, a reversal of the unusually large layoffs that occurred during late 2008 and over 2009. To the extent that this reversal has been completed, further significant improvements in the unemployment rate will likely require a more-rapid expansion of production and demand from consumers and businesses, a process that can be supported by continued accommodative policies.

I am at the moment in a position that I’ve called essentially patient vigilance–meaning that I want to see how the economy evolves before drawing conclusions that more stimulus is needed and could actually have the effect where the benefits would outweigh the costs. I don’t rule it out.

“With numerous monetary policy actions still on the table, and others still affecting the economy with a lag, it may be especially difficult to remove policy accommodation at the appropriate pace and at the appropriate time,” Bullard said at an investment conference sponsored by Credit Suisse Group AG. “One may want to approach such a situation with caution.”

The (FOMC) has said that the first rate increase will be late 2014 but there is a lot of uncertainty about that date. If we continue to get better data about the U.S. economy, I think the likely move would be to shorten the time until the first rate increase.

I think late 2013 could be the date of the first rate increase, but I am just one man and the committee's judgment is 2014.

At 8.3 percent, the unemployment rate is substantially above reasonable measures of the natural rate; the output gap is probably 5 to 6 percent; and underlying inflation measures are projected to be below our 2 percent objective for a number of years.

Clearly, more accommodation would be appropriate.

"I would see an argument for initiating that exit [from the Fed's accomodative stance] in 2012 or 2013," Narayana Kocherlakota, president of the Minneapolis Federal Reserve Bank, told reporters after a speech at Washington University in St. Louis.

Kocherlakota made a similar comment at the same time last year, arguing that rate hikes were possible in 2011.

“I don’t feel the need for additional accommodation right now,” he said to reporters after the speech. Kocherlakota said he sees the Fed beginning to withdraw monetary stimulus in 2012 or 2013 if the economy meets his forecast, including an inflation rate of 2 percent or higher during the next two years.

“That doesn’t mean I want to raise rates tomorrow,” he said. “You want to be cautious about that.”

Financial market operators keep looking and hoping for more. Why? I think it may be because they have become hooked on the monetary morphine we provided when we performed massive reconstructive surgery, rescuing the economy from the Financial Panic of 2008–09, and then kept the medication in the financial bloodstream to ensure recovery. I personally see no need to administer additional doses unless the patient goes into postoperative decline. I would suggest to you that, if the data continue to improve, however gradually, the markets should begin preparing themselves for the good Dr. Fed to wean them from their dependency rather than administer further dosage.

Asked whether the Fed has ruled out a third round of quantitative easing, Bullard said "we never take anything off the table, we want to keep our options open," because the economy can be unpredictable.

"But for now, things are looking better for the U.S. economy and I think it's a good time to wait and see, collect more data," he added.

If the economy does need more stimulus, restarting our program of purchasing mortgage-backed securities would probably be the best course of action.