Inflation is the most serious problem facing the US Federal Reserve and “it may take some time” to fix, Governor Philip Jefferson said on Tuesday, in his first remarks since joining the governing body of the Federal Reserve. central bank.
“Restoring price stability may take some time and will likely involve a period of below-trend growth,” Jefferson said, adding to an ongoing Fed consensus in favor of continuing to raise interest rates.
“I want to assure you that my colleagues and I are determined to return inflation to 2% … We are committed to taking the necessary additional measures,” he added.
Jefferson, an economist and former college administrator, was appointed to the Fed’s board by President Joe Biden and confirmed by the Senate in May.
He and two other new governors came on board amid one of the fastest monetary policy changes in decades, as the Fed raised rates from near zero in May to what is expected to be 4.6% early next year. year.
In remarks prepared for an Atlanta Fed conference, Jefferson said there are reasons to believe that stressed conditions in the labor market may ease. Indeed, new data released on Tuesday showed a sharp drop in job openings in August that began to bring the number of workers wanted by companies more in line with the number of unemployed.
According to Jefferson, this could help smooth wage growth, while there are also signs that “supply bottlenecks have finally begun to resolve,” which could also help ease the pace of wage increases. prices.
However, it remains uncertain how this will play out, and in the meantime “inflation remains high, and this is the problem that concerns me the most,” said Jefferson. “Inflation creates economic burdens for households and businesses, and its effects are felt by everyone.”