Federal Reserve vice chair Philip Jefferson said on Monday that he believes that our policy rate is in restrictive territory. He noted that while the U.S. economy continues to grow at a solid pace, the labour market comes into better balance and inflation declines, though nowhere near as quickly as he would have liked.
Jefferson admitted that the U.S. April inflation reading is encouraging, but warned that it is too early to tell whether the recent slowdown in the disinflationary process will be long-lasting.
The official also noted that the current restrictive policy stance has weighed on the housing market, helping to bring supply and demand into better balance and put downward pressure on inflation.
In addition, Jefferson pledged that he would be carefully assessing the incoming data, the evolving outlook, and the balance of risks, to make judgements about the appropriate stance of the policy rate.