U.S. Federal Reserve (Fed) Vice Chair Philip Jefferson stated on the 1st (local time) that while inflation remains elevated for too long and the risk of entrenchment still exists, more time may be needed to determine whether further rate hikes are necessary. He emphasized that future policy adjustments should be decided through a careful analysis of data trends, changes in economic outlook, and the balance of risks. He said, "While U.S. economic activity and the labor market remain robust, complex shocks such as rising energy prices, the AI investment frenzy, and tariffs are affecting the economy, and these should not be evaluated in isolation." He added, "Since the September meeting, U.S. Treasury yields across all maturities have risen further, suggesting that investors are re-evaluating changing macroeconomic conditions." He continued, "As more data becomes available, we will continue to assess whether inflation can return to target levels at a sufficiently rapid pace and what monetary policy stance is most appropriate." Nick Timiraos, a Wall Street Journal (WSJ) reporter often referred to as the Fed's unofficial spokesperson, analyzed that Vice Chair Jefferson's remarks suggest a lengthening of the period until a further U.S. benchmark interest rate hike, aligning with the existing stance of New York Federal Reserve Bank (FRBNY) President John Williams. According to Timiraos, two top Fed officials are effectively questioning an October hike, even though just a few days ago, investors had continued to raise their bets on the possibility of an October hike.
