Federal Reserve Vice Chair Philip Jefferson said on Wednesday that the current moderately restrictive monetary policy rate is well-positioned to respond to economic developments. He noted that recent inflation data are consistent with further progress toward the Fed's 2% goal, but emphasised that tariffs and the uncertainty surrounding them could slow growth and push inflation higher this year.
Jefferson stressed the importance of monitoring hard data for signs of weaker activity while acknowledging the solid state of the U.S. labour market. He also remarked that Q1 GDP data likely overstated the deceleration in activity. Whether tariffs result in persistent inflation, he added, will depend on their implementation, supply chain adjustments, and broader economic performance.