Fed Gov. Philip Jefferson
- Policy rate is in restrictive territory.
- We continue to see labor market come into better balance and inflation decline, though nowhere near as quickly as would have liked
- Will assess incoming data, evolving outlook, balance of risks to set appropriate stands of policy rate.
- US economy growing at solid pace, labor market remains solid.
- Expect consumer spending growth to slow later this year.
- Too early to tell if recent slowdown in disinflationary process will be long-lasting.
- April's better inflation reading is encouraging.
- Fed staff estimates core PCe prices rose at annual 4.1% in first four months of 2024 with 12 month change at 2.75%.
- Long-term inflation expectations show Americans believe Fed will make good on 2% inflation goal.
- Restrictive monetary policy has weighed on housing market.
- Market rates take a long time to pass through to PCE Housing services prices.
- Large increase in market rents during pandemic may keep housing services inflation elevated for a while.
Comments from Fed Gov. Jefferson are cautionary (like other Fed officials)
After Jefferson's comments, yields remain higher on the day but off their highest levels:
- 2-year yield 4.837%, +1.2 basis points.
- 5-year 4.462%, +2.3 basis points
- 10 year yield 4.445%, +2.5 basis points
- 30-year yield 4.586%, +2.5 basis points
US stocks remain higher led by the NASDAQ Index up 0.66%.All of the three major indices are on pace for a record close today.
- Dow Industrial Average average high close is at 40,003
- S&P high close is that 5308.14
- NASDAQ high close coming into today is at 16742.39