Jefferson emphasizes policy flexibility at 3.50%-3.75% rates but avoids signaling June FOMC move amid inflation and energy risks.
Federal Reserve Vice Chair Philip Jefferson stated monetary policy remains well positioned to address economic developments, with the federal funds rate at 3.50% to 3.75%. He declined to preempt the outcome of the June 16-17 FOMC meeting, stressing a data-dependent approach.
Jefferson highlighted upside inflation risks, though he expects tariff and energy-driven price pressures to ease later in 2026. He also noted the U.S. economy’s exposure to oil-related shocks, which pose downside risks to growth and upside risks to inflation. Recent economic activity has remained solid, with a stable labor market, though employment conditions face potential headwinds.
The remarks, his first since new Fed Chair Kevin Warsh’s swearing-in, avoided signaling the direction of the next policy move, leaving markets to weigh incoming data ahead of June.