Federal Reserve Vice Chair Philip Jefferson said the current stance of US monetary policy remains appropriate as the central bank navigates persistent inflation risks and an economy that continues to show resilience.
Speaking at the 2026 Bank of Japan-Institute for Monetary and Economic Studies Conference, Jefferson said the federal funds target rate range of 3.5% to 3.75% leaves the Federal Reserve well positioned to respond to evolving economic conditions.
Jefferson indicated that policymakers remain data-dependent and have not yet decided the course of action for the Federal Open Market Committee’s June 16–17 meeting. Jefferson said he was looking forward to discussions with fellow policymakers on the measures needed to achieve the Fed’s dual mandate of price stability and maximum employment.
The remarks marked Jefferson’s first public comments since Kevin Warsh was sworn in as the new chair of the Federal Reserve last week, succeeding Jerome Powell, who will continue serving as a governor for a period. Reuters noted that Warsh, once viewed as a policy hawk, had recently shown support for lower interest rates while seeking the Fed’s top position. However, market participants largely expect the central bank to remain cautious amid elevated inflation linked to US import tariffs and geopolitical tensions in the Middle East.
Jefferson acknowledged that while the United States is a major oil producer, the economy remains vulnerable to global energy disruptions caused by the ongoing conflict in the Middle East. According to Reuters, he said inflationary pressures are expected to ease later this year, though risks remain tilted to the upside.
He also described the broader US economy as solid, supported by a stable labour market characterised by low levels of both hiring and layoffs. At the same time, Jefferson said risks to employment conditions were skewed to the downside.
In separate remarks on Thursday at the same conference, Jefferson reiterated that bringing inflation back to the Federal Reserve’s 2% target remains the priority because the labour market has so far remained resilient despite the energy shock.
Jefferson said the strength of the labour market gives policymakers room to focus more directly on restoring price stability while continuing to monitor employment conditions in line with the Fed’s dual mandate.
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