Fed's Jefferson Says Policy Stance Leaves Central Bank Well Positioned for Risks

By Jessica Coacci

Federal Reserve governor Philip Jefferson said the current monetary policy stance should continue to support the labor market while allowing inflation to resume its decline toward the Fed's target goal of 2%.

Speaking at an event in Stanford, Calif., Jefferson said the Fed's benchmark rate range of 3.5% to 3.75% leaves the economy well positioned to respond to economic developments, but may reconsider that stance if inflation does not start to cool down soon.

Speaking at an event in Stanford, Calif., Jefferson said the Fed's benchmark rate range of 3.5% to 3.75% leaves the central bank well positioned to respond to economic developments, but added that the Fed may need to reconsider that stance if inflation does not start to cool down soon.

"In a scenario where actual inflation does not start to cool down soon, I believe that it could be appropriate to reconsider our current policy stance to ensure we fulfill our commitment to deliver price stability," according to a published text of his remarks.

When the public believes the committee will return inflation to its target, Jefferson said, policymakers have more flexibility to respond appropriately to a full range of shocks the economy may experience.

"If inflation expectations risk becoming unanchored, then a stronger reaction to the inflation side of our mandate may be warranted," he said.

Jefferson's comments come before the Fed's meeting on interest rates later this month. Earlier, Dallas Fed President Lorie Logan said the committee should raise interest rates to combat high inflation.

Write to Jessica Coacci at jessica.coacci@wsj.com

(END) Dow Jones Newswires

July 16, 2026 19:14 ET (23:14 GMT)