Fed Vice Chair Signals Higher Policy Floor, Rates in Neutral Range (2026-02-07)

Fed Vice Chair Philip Jefferson said in a Brookings Institution speech on February 6, 2026, that the federal funds rate is “essentially in the neutral range,” with further rate cuts likely contingent on close monitoring of economic data. He noted current policy is well-calibrated to balance full employment and inflation trending toward the 2% target. Jefferson上调了他的2026年展望, projecting GDP growth of 2.2%, roughly matching 2025 levels. The unemployment rate is expected to remain around 4.4% as the labor market remains broadly balanced with low hiring and low layoffs. Inflation remains sticky due to tariff impacts; core PCE (ex-food and energy) is estimated at 3% as of year-end 2025, similar to late 2024. Once these effects fully materialize, inflation could resume its downward trend, particularly as services prices are easing and productivity gains are exerting下行 pressure.