Fed's Jefferson says do not want to prejudge January rate-setting decision

Fed's Jefferson's remarks suggest a cautious but balanced approach to future rate decisions, emphasizing that while there are upside risks, inflation is expected to eventually align with the 2% target.

Newsquawk StaffPublished On the live feed at , 20 minutes before this page
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  • Some upside risks remain, but expect inflation to return to path back to 2%.
  • Inflation somewhat elevated, climb in core good prices inconsistent with return to 2% inflation.
  • Cautiously optimistic for 2026, though face risks to both employment, price stability goals.
  • Pleased to see increased use of standing Repo operations when economically sensible.
  • Expect 2% economic growth in near term, unemployment rate to hold steady this year.
  • Fed rate cuts since 2024 have brought policy rate into range consistent with neutral.
  • Current policy stance leaves US well positioned to determine how much and when to adjust policy rate.
Context

His comments indicate a wait-and-see perspective for January's meeting, which could imply that markets should brace for some volatility in expectations around Fed policy, especially as inflation dynamics evolve and economic growth forecasts hover around 2%. This stance could also affect USD momentum as traders reassess interest rate trajectories.

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