Fed's Clarida sounds very dovish note on policy outlook

Indeed, he was arguably among the most dovish of recent Fed speakers thus far.

In remarks prepared for a speech at New York University, the vice-chairman of the Federal Reserve, Richard Clarida, also said it was not yet clear whether inflation had returned to 2.0% on a sustinable basis.

"Notwithstanding strong economic growth and a low unemployment rate, inflation has surprised to the downside recently, and it is not yet clear that inflation has moved back to 2 percent on a sustainable basis," he said.

"As I consider what, if any, adjustment to our policy stance is warranted to achieve and sustain our dual-mandate objectives, I will closely monitor the incoming data on inflation expectations as well as actual inflation."

He also gave a nod to concerns expressed by some market observers regarding the possible negative impact that the central bank's balance sheet run-off might have.

"If we find that the ongoing program of balance sheet normalization or any other aspect of normalization no longer promotes the achievement of our dual-mandate goals, we will not hesitate to make changes."