Live Updates > Live Update Details
2026-07-17 07:04:14
[Fed Vice Chairman Jefferson: AI and Middle East Conflict are Two Key Variables to Watch; Policy is Prepared for Different Scenarios] 1. Federal Reserve Vice Chairman Jefferson stated that the current policy stance should support the job market and, as the effects of tariffs and energy prices are transmitted, put inflation back on track towards 2%. He is "firmly committed" to restoring inflation to the 2% target, consistent with the Fed's dual mandate. 2. Jefferson emphasized that if inflation fails to begin to cool, the policy stance may need to be re-evaluated to ensure price stability. He pointed out that a series of rapid shocks could cause inflation to solidify, making inflation expectations unanchored; therefore, each factor cannot be viewed in isolation, and the overall economy must be considered when formulating policy. 3. Jefferson revealed that the Fed is currently closely monitoring the development of two key variables: the Middle East conflict and the proliferation of artificial intelligence. He expects the impact of the Middle East conflict on demand to be limited because the US is a net oil exporter, and its economy is less dependent on oil. However, regarding artificial intelligence, he noted that its economic shock could have a lasting impact on supply and demand. 4. Jefferson stated that the current policy framework is flexible enough to respond effectively to the latest data, changing prospects, and the balance of risks. He stated that the current situation reflects a policy dilemma, highlighting a certain tension between the dual objectives of achieving full employment and price stability.
