Federal Reserve Vice Chair Philip Jefferson said the current stance of US monetary policy remains appropriate despite ongoing upside risks to inflation tied to the Middle East conflict and energy disruptions. Speaking at the Bank of Japan-IMES Conference in Tokyo, Jefferson said the current federal funds rate range leaves the Fed “well positioned to respond to economic developments based on the incoming data, the evolving outlook, and the balance of risks.”
Jefferson acknowledged that inflation pressures are expected to ease later this year, but warned that risks to the outlook remain skewed higher. He noted that while the United States is a major energy producer, it is “not fully insulated from the energy disruptions the war has created.”
At the same time, Jefferson avoided signaling any predetermined move for the June FOMC meeting, stressing that he had “not prejudged the next meeting.”
He described the US economy as still delivering a “solid performance,” while characterizing the labor market as stable with low hiring and firing. However, Jefferson added that job-market risks are “tilted to the downside,” underscoring the delicate balancing act facing the Fed as policymakers weigh persistent inflation pressures against softer growth risks.
