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HomeEconomyFed Governor Jefferson pledges firm fight against inflation in first speech

Fed Governor Jefferson pledges firm fight against inflation in first speech

(Bloomberg) – Federal Reserve Governor Philip Jefferson said reducing high inflation is the central bank’s top priority, and it may take a period of weak growth to ease demand.

“It may take some time to restore price stability, and a period of below-trend growth is likely,” Jefferson said Tuesday in Atlanta in his first speech since joining the Fed as president in May express. “My colleagues and I are determined to get inflation down to 2%.”

Fed officials raised interest rates in September by 75 basis points 25 meeting for the third time in a row as they face inflation near a four-year high and forecast further tightening ahead. Officials’ median forecast is for rates to rise to 4.4% by the end of the year, from the current target range of 3% to 3%. 25%.

“The full effect of monetary policy will take time, but in my brief time at the FOMC, we took bold action to We are committed to taking the further steps necessary to address rising inflation,” Jefferson said.

Jefferson, speaking at the Atlanta Fed’s Tech Disruption Conference, said that inflation “has gone up, and that’s my biggest concern.” He said that even with the recent drop in natural gas prices, he was concerned that high prices could affect public expectations.

“While oil and gasoline prices have declined in recent months, I am concerned about volatility and the price of commodities that people are most concerned about, such as food and housing, will affect expectations for future inflation,” Jefferson said. .

Federal Reserve governors described the U.S. labor market as “very tight,” citing high levels of resignations and job openings. The U.S. Labor Department reported earlier Tuesday that job openings emerged in August The biggest drop since the early days of the pandemic. There were about 1.7 jobs per unemployed person, down from about 2 in July.

And the resulting wage compression could lead to further down the road upward pressure on wages,” he said.

©2022 Bloomberg LP

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