Jefferson says Fed needs more time on next rate move
Federal Reserve Vice Chair Philip Jefferson says policymakers may need more time before deciding their next move, as traders' own rate-hike bets keep swinging.
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UpdateThursday, October 1, 2026 at 1:33 PM ET
The later filing adds a third hawkish voice to the roster: Fed officials Michael Barr and Austan Goolsbee have been joined by St. Louis Fed President Alberto Musalem in speaking in favour of further tightening.
Federal Reserve Vice Chair Philip Jefferson said the central bank may need more time to decide its next policy move, a comment that lands as traders themselves have been unable to settle on one.
On September 29, New York Fed President John Williams said policymakers were in no rush to act, and traders trimmed the odds of an October rate hike to 50-50 from 70%. The euro fell to $1.1312, its weakest since May 2025, on the same shift. Later that day, a stronger than expected September payrolls report, 90,000 new jobs against forecasts of 38,000 and above August's 75,000 gain, pushed expectations back toward a hike. Then on September 30, a cooler core PCE Price Index reading for the second quarter, 0.3% against a forecast of 3.6% (a figure corrected from an initially reported 3.3%), pulled expectations toward no hike again.
Long-dated borrowing costs have not waited for the market to make up its mind. The 30-year fixed mortgage rate has climbed to 7.3%, its highest since November 2023, with mortgage applications down 6.0% in the week ended September 25, as the 10-year Treasury yield has pushed above 5.2% on expectations of a persistent hiking path.
Jefferson's reluctance to commit to a near-term move keeps that ambiguity open rather than resolving it. Other officials, including Barr and Goolsbee, have taken a more hawkish tone, and the gap between their rhetoric and the market's wavering rate-hike odds remains unresolved. With yields and mortgage rates already priced for a firmer path, the next inflation or employment report is left to do the work Jefferson's comment did not.