A top Federal Reserve official opens door to keeping rates high for longer

Federal Reserve Vice Chair Philip Jefferson suggested that the central bank’s key rate may have to remain at its peak for a while to bring down persistently elevated inflation. Jefferson said he expects inflation to continue to slow this year. But he omitted a reference to the likelihood of future rate cuts that he had included in a previous speech in February. Instead, he said his outlook is that inflation will cool even with the Fed’s key rate “held steady at its current level.” If elevated inflation proves more persistent than he expects, Jefferson added, “it will be appropriate” to keep rates at their current level “for longer” to help slow inflation to the Fed’s 2% target level.