Fed may take time to make next interest rate move, Jefferson says
TLT•Federal Reserve Vice Chair Philip Jefferson said policymakers may take more time before deciding on another rate move, while inflation remains elevated and risks to his inflation outlook are tilted to the upside. The Fed raised its benchmark rate by a quarter point in September to a 3.75%-4.00% range.
1. No urgency on next move
Jefferson said he supported the Fed’s September rate increase but saw no urgency to make another move. He said future policy adjustments should be based on data trends, the evolving outlook and the balance of risks, and that policymakers may need more time to reach a judgment.
2. Inflation risks remain
Jefferson said inflation would likely stay elevated in the near term before resuming its decline toward the Fed’s 2% goal as energy and other price shocks fade. He said recent geopolitical developments and stronger-than-anticipated demand tilted risks to his inflation forecast to the upside, while risks to economic activity and the job market were roughly balanced.
