(Bloomberg) -- Federal Reserve Vice Chair Philip Jefferson said he expects inflation will continue to moderate with interest rates at their current level but persistent price pressures would warrant holding borrowing costs high for longer. 

Jefferson said Tuesday that while there has been considerable progress in lowering inflation, the Fed’s task of sustainably restoring 2% inflation is “not yet done.” 

The comments, when paired with those of his colleagues in recent days, reinforce policymakers’ lack of urgency to lower interest rates in the near term. Jefferson did not directly reference the timing or prospect of rate cuts this year in his prepared remarks. 

“My baseline outlook continues to be that inflation will decline further, with the policy rate held steady at its current level, and that the labor market will remain strong, with labor demand and supply continuing to rebalance,” Jefferson said in a speech in Washington. 

“Of course, the outlook is still quite uncertain, and if incoming data suggest that inflation is more persistent than I currently expect it to be, it will be appropriate to hold in place the current restrictive stance of policy for longer,” he said.

Chair Jerome Powell is also scheduled to speak later Tuesday.

Fed Projections

Projections released last month showed Fed officials narrowly penciled in three rate cuts for this year. Nearly half saw two or fewer. Since then, data on the labor market, consumer spending and inflation has reinforced a patient approach.

The Fed vice chair noted the strength of recent job gains and that inflation over the past three months was above the low readings in the second half of last year. He anticipates first quarter economic growth to moderate from the prior period but remain solid. 

In an otherwise mostly academic speech, Jefferson outlined that the Federal Open Market Committee needs to look at a wide range of data to understand changes in the economy, particularly during times of heightened uncertainty.

“It is clearly beneficial to look at the totality of the data to identify changes in the economy in real time, to embrace the risk-management considerations associated with uncertainty that factor into FOMC decisions, and to adapt policy to the evolution of the economy,” he said.

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