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00:00 Jared
as Vice Chair Philip Jefferson shares a hawkish tone on interest rates. We have Yahoo Finance’s Jennifer Schonberger now with the latest. What is the latest, Jen?
00:11 Jennifer Schonberger
Hey there, Jared. Good to see you. Happy Friday. Yeah, we heard from Vice Chair of the Reserve Philip Jefferson earlier today, who says that he sees the Fed’s benchmark interest rate in the broad range of estimates for neutral. That’s a level designed to neither spur nor slow economic growth. He says he’s closely looking at the economic data for any additional rate cuts this year. Speaking earlier this afternoon at the Brookings Institution in Washington, Jefferson said, quote, the current policy stance is well positioned to address the risks to both sides of our dual mandate. He went on to say, our policy stance should help stabilize the labor market while allowing inflation to resume its decline toward our 2% target. Now, Jefferson painted a nice picture for the year ahead,
00:54 Jennifer Schonberger
raising his outlook for the economy on signs of resilience. He now sees GDP in the range of 2.2%, which is about in line with what we saw last year. Though he noted that inflation has stalled over the past year on account of tariffs, he expects inflation to resume dropping once tariffs have worked their way through goods prices. Now, when it comes to the job market, he sees signs of stabilization, and while he cautioned that he still sees some downside risks to growth there, he thinks the unemployment rate is going to hold approximately steady in the range of where it is right now at 4.4%.
01:28 Jennifer Schonberger
Now, elsewhere today, we also heard from San Francisco Fed President Mary Daly, who posted on LinkedIn that she still has concerns about the strength of the job market. She noted that the low hire, low fire environment could persist, but then added that she knows workers are aware that things could change quickly, leaving them in what she called the no hiring, more firing labor market. Daly saying, quote, with inflation printing above the Fed’s 2% goal, this rightly feels precarious. Jared, I’m sort of inferring there that Daly has some concerns about the job market. Perhaps she sees some more room to cut there. Back to you.
02:03 Jared
And one more question here, stick with me. What about concerns over Kevin Warsh? I know we got a heavy Fed calendar next week in terms of speeches, but uh, have we heard anything on that front this week?
02:14 Jennifer Schonberger
I’m so glad you asked that because the economics department at Duke University just did a survey of former Fed officials and former Fed staffers and found that two-thirds actually support Warsh’s nomination. They say that he’s got great institutional knowledge. They acknowledge that, you know, he was there during the 2008 financial crisis. Though some did express some concern about Warsh’s past criticism of Central Bank policies, while others argued that Warsh was mistaken on key policy issues when he was a Fed governor. As for his loyalties to President Trump when he is confirmed for fetcher if and when, participants, responders, unsure about that point, Jared.
02:59 Jared
Yeah, and I believe he was the youngest Fed governor at least at the time over the financial crisis in 2008. All right, thank you for that report, Jen.
03:06 Jennifer Schonberger
Thanks so much.