Fed Vice Chairman Jefferson: Job Market Faces Potential Pressure Without Fed Support

Federal Reserve Vice Chairman Philip Jefferson stated that he expects the U.S. economy to continue growing at around 1.5% for the remainder of the year, and that the job market would face potential pressure without support from the Fed. He expressed his support for a 25 basis point interest rate cut at the Fed's September meeting to balance the risks of persistently above-target inflation against increasing threats to the job market.

Jefferson said, "The labor market is softening, suggesting it could face pressure if support is lacking."

Jefferson stated that he expects inflation to begin declining toward the Fed's 2% target after this year. Jefferson noted that the impacts of the Trump administration's trade, immigration, and other policies are still evolving, leading to particularly high uncertainty in his baseline forecast. Although the impact of tariffs on inflation and other aspects of the economy has been lower than some economists expected, Jefferson said he anticipates these effects "will become more apparent in the coming months."