MNI: Fed Gov Jefferson Expects Rates To Hold Steady
Fed vice chair makes no mention of lowering interest rates but warned more persistent inflation would require restrictive policy for longer.
Federal Reserve Governor Philip Jefferson said Tuesday interest rates will likely hold steady as there has been considerable progress in lowering inflation but the job of sustainably restoring 2% inflation is not yet done. His prepared remarks made no mention of lowering the policy rate.
"My baseline outlook continues to be that inflation will decline further, with the policy rate held steady at its current level, and that the labor market will remain strong, with labor demand and supply continuing to rebalance," he said in prepared remarks.
"Of course, the outlook is still quite uncertain, and if incoming data suggest that inflation is more persistent than I currently expect it to be, it will be appropriate to hold in place the current restrictive stance of policy for longer," Jefferson said. "I am fully committed to getting inflation back to 2%." (See: MNI INTERVIEW: One Fed Cut Most Likely 2024 Outcome - Keister)
Real GDP growth in the fourth quarter of 2023 was 3.4%, and Jefferson expects first quarter economic growth to slow but remain solid, he said in remarks which focused on economic uncertainty, noting recent readings on both job gains and inflation have come in higher than expected.