The Fed blackout is hours away; Jefferson says he doesn't want to pre-judge Jan decision

Jefferson's Statements

Jefferson from the Federal Reserve recently indicated that he is inclined to defer judgment on interest rate setting. He noted that while there is a prospect for inflation to return to 2%, some risks remain, particularly regarding the inconsistency of rising core goods prices with inflation control. Additionally, he expressed cautious optimism for 2026 while highlighting risks to both employment and price stability goals. This information is crucial for the market, indicating the scope for adjustments in the policy interest rate.

Economic Growth Outlook

Jefferson projected a near-term economic growth rate of 2% and expected the unemployment rate to remain steady this year. He mentioned that the current policy stance provides a favorable situation for interest rate adjustments but avoided specifying numerical values.

Market Reaction and Future Forecasts

Currently, a hold on interest rates at the January 28 meeting is priced at 95% in the market, with discussions about the possibility of rate cuts being more prominent. This stance's impact on future policy decisions remains unpredictable, yet the market is showing a cautious approach.