Federal Reserve Jefferson: Policy will remain restrictive for longer if necessary

On April 16, Federal Reserve Vice Chairperson Jefferson said on Tuesday that if inflation did not slow as expected, "it would be appropriate to maintain the current restrictive policy stance for a longer period of time." "My underlying expectations remain that inflation will fall further, policy rates will remain unchanged at current levels, the labor market will remain strong, and labor demand and supply will continue to rebalance." "If the data show that inflation is more persistent than I currently expect, then it would be appropriate to maintain the current restrictive policy stance for a longer period of time." His remarks did not include the standard message from Fed officials in recent months that interest rate cuts could begin once officials have more confidence that inflation is still falling. He noted that inflation data for the past three months were above the lows seen in the second half of last year, while job growth and retail spending remained stronger than expected, and that "the work to sustainably restore 2 percent inflation is not yet complete."