by Howard Schneider
WASHINGTON (Reuters) – Federal Reserve Vice Chairman Philip Jefferson said on Thursday he remained “cautiously optimistic” about progress in bringing inflation back to target, but he did not give an estimate. indications on the date from which rate cuts could begin.
In comments to the Peterson Institute for International Economics, Philip Jefferson said Fed staff estimates showed PCE inflation rose 2.4 percent year-over-year in January, the underlying indicator. underlying having increased by 2.8%.
The gauge will be released next week, but Philip Jefferson said the Fed’s estimates suggested the “pronounced” decline in inflation was continuing and the central bank should be able to cut rates later this year .
“I remain cautiously optimistic about our progress on inflation,” underlines Philip Jefferson. “If the economy generally performs as expected, it will likely be appropriate to begin easing our policy later in the year.”
Among the risks to the central bank’s base case, Philip Jefferson raised the possibility that strong consumer spending “causes inflation to stagnate”, that weakening labor markets justifies faster rate cuts, or that external shocks cause prices to rise.
(Reporting Howard Schneider, Corentin Chappron, edited by Sophie Louet)
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