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(Reuters) – Federal Reserve Vice Chairman Philip Jefferson said on Tuesday that the U.S. central bank’s 0.5 percentage point interest rate cut last month was aimed at keeping the labor market strong even as inflation continues to ease. stated that the purpose is
Referring to the interest rate-setting Federal Open Market Committee, of which he is a member, Mr. ” he said. “To maintain labor market strength, my FOMC colleagues and I recalibrated our policy stance last month.”
The Fed’s 50 basis point (bp) rate cut at its Sept. 17-18 meeting was larger than many analysts expected. In remarks prepared for a speech at Davidson College in Davidson, North Carolina, Mr. We explained the reasons behind this decision.
“Economic activity continues to grow at a solid pace. Inflation has eased significantly. The labor market has cooled from its previous hyperthermia,” said Mr. Jefferson.
Mr. Jefferson said the Fed’s target index of inflation (year-over-year change in the personal consumption expenditure index) was 2.2% in August, “much closer” to the Fed’s 2% target than 6.5% two years ago. said.
“We look forward to continuing to make progress toward that goal.”
Meanwhile, the unemployment rate was 4.1%, a “limited” increase from 3.8% a year ago, Jefferson said. However, employment growth has slowed. “The labor market has clearly cooled down,'' he said.
In much the same language as the Fed’s post-meeting statement released last month, Jefferson said the Fed would closely monitor future data, prospects and the balance of risks when considering further rate cuts.
“My approach to monetary policy making is to make decisions meeting by meeting," Mr. Jefferson said. “As the economy develops, I will continue to update my thinking on policies that best promote maximum employment and price stability.”
(Reporting by Ann Safir; Editing by David Gregorio)
