Federal Reserve Vice Chairperson Jefferson: Without the Federal Reserve's support, the job market would face potential pressure

Federal Reserve Vice Chairperson Jefferson said he expects the U.S. economy to continue to grow at around 1.5 percent for the rest of the year and that the job market will come under potential pressure without the Fed's support. He said he supports the Fed cutting interest rates by 25 basis points at its September meeting to balance the risk of persistently above-target inflation with the growing threat to the job market. "The labor market is softening, which suggests it could come under pressure if there is a lack of support," Jefferson said, adding that he expects inflation to start falling back to the Fed's 2 percent target after this year. Mr. Jefferson noted that the impact of the Trump administration's trade, immigration and other policies was still evolving, making his baseline forecast particularly uncertain. While the impact of tariffs on inflation and other aspects of the economy was lower than some economists had expected, Mr. Jefferson said he expected them to "become more apparent in the coming months".