Fed Vice Chair Philip Jefferson said inflation will be the key metric in
deciding whether to raise rates further, noting October price data remain well
above the Fed’s target. He said economic activity and the labor market are still
robust but price pressures persist, and that inflation’s trajectory will provide
the primary signal for appropriate policy. Jefferson urged policymakers to
monitor incoming data to decide if further policy adjustments are needed. His
remarks capped a week of Fed speeches that reinforced market expectations of a
December rate hike; some officials urged faster tightening, with Governor Waller
warning a 50bp move may be needed next month, while Philadelphia Fed president
Paulson continued to advocate a gradual hiking approach.
