Federal Reserve Vice Chair Jefferson: Iran War Will Drive Up Inflation, but Rates Are "Appropriately Positioned"

Golden Finance reported that on April 8, the U.S. Federal Reserve Vice Chair Philip Jefferson said that a war involving Iran would bring about uncertainty and would raise U.S. inflation in the near term, but that the central bank’s current monetary policy settings were still appropriate.
Jefferson described the current interest rate level as roughly within a range that neither stimulates nor restrains the economy. He said that, under the current stance, employment would be supported, and as the effects of tariffs fade, inflation is expected to gradually fall back to the 2% target level.
In remarks delivered Tuesday at the University of Detroit Mercy, Jefferson said: “I remain cautious about the economic outlook. Economic uncertainty is already at a high level, and rising energy prices and conflicts in the Middle East further intensify this uncertainty. However, I still believe that our current policy stance is appropriate and allows us to assess how the economy evolves.”
Although Jefferson said he expects the broader disinflation trend to continue, he was cautious about how a war involving Iran would affect inflation and consumer demand, saying that the conflict has made his own assessment of price developments more complicated.
Jefferson said: “However, the recent rise in energy prices will put upward pressure on overall inflation—at least in the short term. Ongoing trade policy uncertainty and geopolitical tensions pose an upside risk to my inflation forecast.”