Fed's Jefferson: I will consider higher bond yields when assessing the future rate path

“I believe that core PCE prices will moderate further as the labor market comes into better balance.”

“Despite the strong September labor market data we received last week, there is evidence that the imbalance between labor demand and labor supply continues to narrow, as labor demand cools while labor supply improves. Even so, the labor market remains tight.”

“Slowing labor demand and improving labor supply have eased pressure in the labor market, and my expectation is for further gradual easing in labor market conditions, as restrictive monetary policy continues to slow labor demand without causing an abrupt increase in layoffs or the unemployment rate.”

“Real long-term Treasury yields have risen recently. In part, the upward movement in real yields may reflect investors' assessment that the underlying momentum of the economy is stronger than previously recognized and, as a result, a restrictive stance of monetary policy may be needed for longer than previously thought in order to return inflation to 2 percent. But I am also mindful that increases in real yields can arise from changes in investor's attitudes toward risk and uncertainty.”

“Looking ahead, I will remain cognizant of the tightening in financial conditions through higher bond yields and will keep that in mind as I assess the future path of policy.”

“I will be taking financial market developments into account along with the totality of incoming data in assessing the economic outlook and the risks surrounding the outlook and in judging the appropriate future course of policy.”