Crypto & Forex October 3, 2025 0 Comments

Fed’s Jefferson Sounds Alarm: The Hidden Threats That Could Rock the Economy—Are You Ready to Profit or Get Burned?

You ever watch the Federal Reserve wrestle with its own shadow? It’s like watching a tightrope walker balancing a flaming torch—one misstep and the whole tightrope could go up in smoke. Phillip Jefferson, the Vice President and Board of Governors member, just laid it out: inflation’s still playing hardball above the target, and the labor market’s starting to show cracks like an old sidewalk. What’s throwing a wrench in the gears? A mix of stubborn inflation caressed by tariffs and a labor force that’s feeling the pinch, partly because fewer folks are immigrating in. It’s a tricky dance—the Fed’s gotta juggle cooling inflation without causing a labor market collapse. Talk about being stuck between a rock and a hard place! The recent policy nudges are inching toward neutral, but the road ahead looks bumpy, especially with AI’s elusive productivity puzzle and the tariffs quietly nudging prices upward. So—can the Fed keep the economy’s wheels turning without overheating or stalling? Buckle up, this monetary rodeo isn’t slowing down anytime soon. LEARN MORE

Federal Reserve (Fed) Vice President and Board of Governors member Phillip Jefferson acknowledged that ongoing risks to both sides of the Fed’s policy mandates are seeing growing risks. The labor market is showing fresh weakness, and inflation pressures continue to mount in underlying datasets, leaving the Fed in a difficult spot on rate policy-setting.

Key highlights

Less than ideal not to get jobs report, but look across array of data to assess the economy.
Trends across several data series suggest job market softening, could experience stress if not supported.
Decline in net immigration a major factor preventing more significant rise in unemployment.
Both sides of the mandate are under stress, with inflation above target and downside risks to employment increasing.
Recent cut moved policy closer to neutral while maintaining a balanced approach.
Tariffs are showing through in higher inflation for some goods, but expect disinflation to resume next year.
Removing “average” from the framework was important. It was hard to communicate what it meant.
Running inflation above target to make up for past misses turned out to be impractical.
I’m trying to understand as much as possible about AI and possible impact on productivity.
The Fed has enough information to do its job. We will be well informed going into the October meeting.
The response to tariffs has been muted so far, but possible that the price level adjustment will take longer than forecast.
Fed’s job is to be sure that the adjustment of tariffs does not translate into persistent inflation.
The Fed will hit its 2% inflation target.
Long-term inflation expectations are anchored around 2%.