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Federal Reserve · October 2, 2026 · 2 min read

Fed Vice Chair Jefferson: GDP grew 2.4% in first half, inflation 'too high for too long'

By Econ Data Tools Editorial Team

Published October 2, 2026 • Updated October 2, 2026

Reviewed by Independent primary-source verification

In an October 1, 2026 speech, Fed Vice Chair Philip Jefferson said GDP grew at a 2.4% pace in the first half of 2026, the unemployment rate was 4.1% in August and 12-month PCE inflation was 3.4% in August. The FOMC raised the funds rate range to 3.75% to 4.00% in September.

Federal Reserve Vice Chair Philip N. Jefferson spoke on the U.S. economy and monetary policy on October 1, 2026. The remarks are published on the Federal Reserve Board's website. On growth, he said real GDP expanded at a 2.4 percent pace in the first half of this year, roughly in line with its potential rate, despite several shocks. He said he expects near-term growth to stay about the same as the first-half pace, with risks to that forecast roughly balanced. On the labor market, he said a broad range of data indicates conditions have stabilized. The unemployment rate has moved roughly sideways this year and ticked down to 4.1 percent in August, and he expects it to stay around its current level through the rest of the year. These remarks came before the Bureau of Labor Statistics reported a 4.2 percent rate for September on October 2. On inflation, he said it has been too high for too long. The 12-month change in the PCE price index was 3.4 percent in August. He said he expects inflation to stay elevated in the short run before resuming its decline toward the 2 percent goal, and that risks to his inflation forecast are tilted to the upside. On policy, he said the FOMC voted last month to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, a decision he supported. He said any future adjustments should be determined by carefully examining trends in the data, the evolving outlook and the balance of risks. This brief summarizes the speech. The views are Jefferson's own and not a statement of the FOMC.

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