Federal Reserve Vice Chair Philip Jefferson is “cautiously optimistic,” although he cautioned that the trend of U.S. employers being slow to both hire and fire has persisted.
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New trading tool for QQQ bulls“I see the overall labor market as roughly in balance, with a low-hiring, low-firing environment prevailing,” Jefferson said in prepared remarks for a speech in Washington. “In this less dynamic labor market, the downside risks to employment remain, but my baseline is for the unemployment rate to hold approximately steady throughout this year.”
Jefferson Says Current Interest Rates are in a Neutral Range
Jefferson added that the Fed is well-positioned to respond to both labor market and inflation risks and that current interest rates hover around a neutral range. That is at odds with Federal Reserve Bank of Atlanta President Raphael Bostic, who said on Friday that rates are “restrictive” and should remain there until inflation winds down to the central bank’s target of 2%.
Jefferson believes that a boost in productivity and the easing effects of tariffs could help drive inflation lower this year. The Fed voted to hold rates in a range between 3.50% and 3.75% last week and is set to meet again on March 18.