Federal Reserve (Fed) Vice Chair Philip Jefferson has warned that the U.S. central bank must “proceed slowly” with any additional interest rate cuts, stressing that monetary policy is now edging closer to a neutral zone where it neither restricts nor stimulates the economy.
Speaking at a Kansas City Federal Reserve event on Monday, Jefferson said last month’s quarter-point rate cut was appropriate, citing rising risks to the labour market and signs that inflationary pressures have “declined somewhat.”
“The current policy stance is still somewhat restrictive, but we have moved it closer to its neutral level,” Jefferson noted. “The evolving balance of risks underscores the need to proceed slowly as we approach the neutral rate.”
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His remarks highlight the widening divide among Fed officials over the direction of future monetary policy, with disagreements centred on how persistent inflation risks remain and whether the U.S. job market will weaken further.
Jefferson added that the recent 43-day U.S. government shutdown has further complicated policy analysis, leaving uncertainties around the availability of key economic data ahead of the Federal Open Market Committee’s next meeting scheduled for December 9–10.
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The Bureau of Labor Statistics is expected to release its September employment report on Thursday, but the full timetable for other delayed datasets is still unclear.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
