Federal Reserve Vice Chairman Jefferson said the current monetary policy is in good shape and will be reconsidered if necessary
Federal Reserve Vice Chairman Philip Jefferson said that if inflation cannot cool down soon, it should consider raising interest rates, but also said that the current monetary policy is in good shape. In remarks prepared for an event in Stanford, Calif., on Thursday, Jefferson said the Fed's current interest rate setting is likely to support the labor market while lowering inflation. But he then added an additional condition. "If real inflation doesn't start to cool down in the near term, I think it might be time to reconsider our current policy stance," he said. "Fortunately, our current policy stance positions us well to respond to economic developments." As the labor market shows more signs of stabilization, discussions among Fed officials have focused entirely on inflation. Tariff pressure has eased, but energy prices - driven by volatility in the Middle East - remain a concern. At the same time, the market demand brought about by the development of artificial intelligence has become a new focus. Investors gave up on expectations for a rate hike at the Fed's July meeting after June price data came in weaker than expected, but still expect a rate hike this year. Earlier Thursday, two regional Fed policymakers expressed stronger concerns about rising prices. Dallas Fed President Lorie Logan said inflation does not appear to be continuing to move toward the central bank's 2% target. She is a voting member of the central bank's rate-setting committee this year and was the first Fed official to call for higher rates. "I currently believe that a modest increase in interest rates would better balance the outlook and risks," Logan said in remarks prepared for an event in Houston on Thursday. Jeff Schmid of Kansas City said inflation was "too high and chronically above target," adding that it would be his focus when considering the right policy direction. Open a futures account on Sina's cooperative platform, safe, fast and guaranteed