Fed Vice Chair Philip Jefferson has signaled support for holding interest rates steady in January, adopting a patient “wait-and-see” approach. He cited a “cautiously optimistic” economic outlook, with steady growth and cooling inflation expected. Jefferson noted that previous rate cuts have positioned policy neutrally, allowing the Fed time to assess data before any further changes. Markets currently see little chance of a cut this month.
Major Points :
Interest Rates on Hold: Federal Reserve Vice Chair Philip Jefferson supports keeping interest rates steady at the upcoming January meeting.
Policy in Neutral: He believes past rate cuts have placed monetary policy in a “neutral” range, allowing the Fed to be patient.
Data-Driven Future Moves: Jefferson emphasized that current policy lets the Fed evaluate incoming economic data before deciding on further adjustments.
Economic Outlook “Cautiously Optimistic”: He forecasts steady growth near 2% and stable unemployment, with inflation expected to gradually return to the Fed’s 2% target.
Tariff Impact Viewed as Temporary: Recent increases in core goods prices are largely attributed to tariffs, which Jefferson sees as a “one-time shift” rather than a lasting inflation driver.
Markets Align with Pause: Financial markets reflect a minimal 5% probability of a rate cut later this month.
