Federal Reserve Vice Chair Philip Jefferson, nominated to be the next vice chair, has warned of risks to both employment and inflation. He maintains that short-term borrowing costs are set appropriately to allow the Fed to respond to uncertainty over rising energy prices and the Middle East conflict. Jefferson also expressed concern that inflation remains above the Fed's 2% target and had expected inflation to decrease later this year due to the effects of last year's tariff shock. He remains cautious about his outlook, but believes the current monetary policy setting is well-positioned to support the labor market while allowing inflation to resume its decline.