Fed Vice Chair Philip Jefferson said that recent inflation numbers suggest the Fed is still making headway toward its 2% target. However, he cautioned that the outlook has become less certain, with the threat of new import tariffs potentially pushing prices higher.
Key Quotes
- Current moderately restrictive policy rate in a good place to respond to economic developments.
- Recent inflation data consistent with further progress toward 2% goal, but future path uncertain due to tariffs.
- Watching closely for signs in hard data of weaker activity.
- Tariffs could lead to higher inflation, still uncertain if impact would be temporary or persistent.
- Expect lower growth due to trade policy but expect economy to still expand over the year.
- First quarter GDP data overstated deceleration in activity.
- Labour market still solid.
- Whether tariffs create persistent inflation depends on implementation, response of supply chains, other factors.
