The Fed's Jefferson is cautiously optimistic about the economy but isn't tipping anything in terms of rate cuts or hikes.
U.S. central bank's current monetary policy 'well positioned' to deal with what likely lies ahead.
Future moves to be driven by data and views on outlook.
Stance allows 'leeway' for supply side of economy to develop.
Jefferson says he is 'cautiously optimistic' about economic outlook.
Job market stabilizing, inflation should moderate.
Strong commitment to price stability reduces inflation risks.
Tariffs likely represent a one-time shift in price level.
It's possible that stronger productivity could temper inflation pressures.
Tariffs were key driver of inflation in 2025, price pressures should ease in 2026.
Personal Consumption Expenditures price index likely up by 2.9% in December on year-over-year basis.
Jefferson says he supported last year's interest rate cuts, policy roughly in neutral stance.
Jefferson says while upside risks remain, he expects inflation pressures to ease.
Job market likely in balance with low-hire, low-fire environment.
Jefferson says he expects economy to grow by 2.2% this year.
Job market softer on reduced demand, immigration issues.
The market is pricing in a 20% chance of a Fed cut in March but that will swing based on Wednesday's non-farm payrolls report.
From the Q&A:
- I do not want to see any further weakening in the labor market
- Once the market impact of tariffs on goods works through, inflation should subside
