Fed Vice Chair Philip Jefferson reaffirmed the cautious approach to policy easing, stating that while a “gradual reduction” in monetary policy restraint towards neutral remains the most likely scenario, there is no urgency to change the current stance.
“I do not think we need to be in a hurry to change our stance,” he said in a speech overnght.
He emphasized that policy decisions will continue to be guided by incoming data and the evolving economic outlook, noting that monetary policy is “not on a preset course.”
Jefferson outlined a “range of scenarios” for future policy moves. If economic activity remains robust and inflation fails to sustainably decline toward 2% target, Fed could maintain its restrictive stance for longer. Conversely, if the labor market weakens unexpectedly or inflation cools faster than expected, the central bank may need to ease policy at a quicker pace.
Meanwhile, San Francisco Fed President Mary Daly echoed similar sentiments, describing the US economy as “in a very good place.” She emphasized that the central bank is in a strong position to “wait and see” before making any policy moves.
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