On Friday, US President Joe Biden selected Philip Jefferson, who joined the Federal Reserve Board of Governors in May 2022, to serve as Federal Reserve Vice Chairman, and the Senate is expected to confirm the appointment.
“I think we’re on the right track,” Jefferson said during a speech at the Hoover Institution in Stanford, Calif.
“Is inflation still too high? Yes. Is the current fall in inflation uneven and slower than we all want? Yes.”
But he stressed that the Federal Reserve is “doing what is needed and expected. Monetary policy affects the economy and inflation with long and uneven lags, and the full effect of (our) rapid tightening is yet to set in.” produce”.
These statements contrast with statements by other reserve officials who did not rule out a further interest rate hike this week, when markets widely anticipate the rate hikes to end.
Inflation fell slightly in the United States, reaching 4.9% year on year, according to the consumer price index (CPI) published on Wednesday. On a monthly basis, however, inflation rose to 0.4% from 0.1% in March.
However, the Federal Reserve prefers another measure of inflation, which is the Personal Consumption Expenditure (PCE) index, which is released at the end of the month, and expects it to drop to 2%, after it was 4.2% in March at an annual rate.
Philip Jefferson continued: “The good news is that food and energy prices fell in March… The bad news is that only slight progress was made on inflation. latent”, i.e. linked to the other categories.
He also pointed to the existence of “great uncertainty about the extent of the tightening of borrowing conditions over the coming year in response to the banking crisis and the extent of the possible repercussions of this tightening on the ‘US economy’, acknowledging the existence of ‘the risk that the impact will be greater than expected.’
Since March 2022, the Federal Reserve has raised the main interest rate by five percentage points, from 0 to 0.25%, to between 5 and 5.25%. The next Fed meeting will be June 13-14.
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