In a Stanford speech, Jefferson said the Fed held rates at 3-1/2 to 3-3/4 percent in June as energy, trade and AI shocks complicate inflation and employment tradeoffs.
Federal Reserve Vice Chair Jefferson said the current policy stance is well positioned to support the labor market while guiding inflation back toward the Fed's 2 percent target, but may need to be reconsidered if inflation does not cool soon. In a Stanford speech, he said policymakers are navigating overlapping shocks from Middle East-related energy pressures, trade policy changes and artificial intelligence, which are affecting both inflation and the economy's productive capacity and complicating the Federal Open Market Committee's price-stability and employment tradeoffs.