Fed Vice Chairman Philip Jefferson said in a speech overnight that the central bank can “take our time” in assessing economic data before making any changes. With the U.S. economy performing well and the labor market remaining solid, Jefferson indicated that there is no immediate urgency to ease policy further.

He acknowledged that progress toward the Fed’s 2% inflation target “has been slow in the past year.” He added that the path of inflation will likely remain “bumpy”.

While the 100 basis points of cumulative rate cuts last year have moved policy closer to a neutral stance, he reiterated that monetary policy is still “restrictive”.

Full speech of Fed’s Jefferson here.

Atlanta Fed President Raphael Bostic reiterated in an interview that rate cuts remain a possibility this year, but emphasized the need for further data clarity before making any decisions.

He maintained a neutral stance, stating, “I am not taking anything off the table. I am not putting anything extra on the table.”

Bostic acknowledged that January’s hotter-than-expected inflation data raised questions about whether it represents “a new trend or just a bump in the road”. He will be closely analyzing economic developments “over the next several months” to determine the correct policy response.

Bostic also defended Fed’s current position, insisting, “I don’t think we have cut too much. We are still in a restrictive posture and that’s what we need.” He reaffirmed that monetary policy remains tight enough to bring inflation down, arguing that waiting until inflation fully reaches 2% before easing would have been a mistake.

FOMC’s January meeting minutes reinforced Fed’s cautious stance, with policymakers emphasizing the need for “further progress on inflation” before considering any rate cuts. The officials acknowledged a “high degree of uncertainty” in the economic outlook, justifying a “careful approach” to policy adjustments.

While Fed remains confident that inflation will ease in the coming months, officials largely pointed to “upside risks to the inflation outlook”, rather than concerns over the job market.

he minutes highlighted several factors that could disrupt the disinflation process, including shifts in trade and immigration policy, geopolitical disruptions to supply chains, and stronger-than-expected household spending. These risks suggest that inflationary pressures could remain stickier than anticipated, keeping the Fed on hold for longer.

Full FOMC minutes here.

Fed Governor Christopher Waller downplayed concerns that tariffs would have a significant, lasting impact on inflation, stating that their effect is likely to be “modest” and “non-persistent.” As a result, he favors “looking through” these effects when setting policy.

In a speech overnight, he emphasized that while economic uncertainty remains, Fed cannot afford to fall into a “recipe for policy paralysis” by waiting for absolute clarity regarding the administration’s policies.

However, he conceded that tariffs could have a larger impact than expected, depending on their size and implementation. At the same time, he pointed out that other policies under discussion could have positive supply-side effects, helping to ease inflationary pressures.

Waller defended Fed’s decision to hold rates steady in January, arguing that the current economic data “are not supporting a reduction in the policy rate at this time.”

He left the door open for future rate cuts, stating that “if 2025 plays out like 2024, rate cuts would be appropriate at some point this year.”

Full speech of Fed’s Waller here.

Fed Governor Michelle Bowman explained in a speech her support for keeping interest rates unchanged last month, citing the need for a patient approach while monitoring inflation developments.

She noted that after a 100 basis point rate adjustment through December, policy is now in a “good place,” allowing the Fed to “pay closer attention to the inflation data as it evolves.”

Bowman also highlighted the importance of assessing the impact of the administration’s policies on the broader economy, stressing the need for a “better sense of these policies” and their implementation.

On inflation, Bowman maintained a cautious outlook, expecting further moderation this year but warning that disinflation progress could remain “bumpy and uneven.” Bowman noted her concerns about “greater risks to price stability”, particularly with a still-strong labor market.

Full speech of Fed’s Bowman here.