02:11 PM EDT, 05/20/2024 (MT Newswires) -- It's premature to say if the recent slowdown in the disinflationary process will last for long, Federal Reserve Vice Chair Philip Jefferson said Monday, while Vice Chair for Supervision Michael Barr separately said the current restrictive monetary policy likely needs additional time to help policymakers achieve their inflation target.

In a bid to combat inflation, the central bank's Federal Open Market Committee increased its benchmark lending rate by 525 basis points from March 2022 through July 2023. It has held interest rates steady since then, with its latest pause coming earlier this month when it said there's been "a lack of further progress" in bringing inflation down in recent months.

"I believe that our policy rate is in restrictive territory as we continue to see the labor market come into better balance, and inflation decline although nowhere near as quickly as I would have liked," Jefferson said in remarks prepared for a speech in New York.

Official consumer and producer price indexes data indicate "a more modest" rise for April than growth in core personal consumption expenditure inflation in the first three months of the year. Fed staff estimates that core PCE prices grew at a 4.1% annual rate over the first four months of the year, which Jefferson said was well above the estimated 2.75% 12-month change.

"It is too early to tell whether the recent slowdown in the disinflationary process will be long lasting," Jefferson said. "The better reading for April is encouraging."

Although consumer spending has been strong over the last several quarters, Jefferson expects growth to slow later in 2024 as higher interest rates hit demand, especially on interest-sensitive spending. While there has been an increase in Americans' inflation expectations over the next 12 months recently, their 10-year outlook remains close to pre-pandemic levels, suggesting the FOMC's "inflation-fighting credibility remains intact," Jefferson said.

Separately, Barr said first-quarter inflation data were "disappointing" and failed to give him the increased confidence he needed to support a case for lowering interest rates. "This means that we will need to allow our restrictive policy some further time to continue to do its work," Barr said in remarks prepared for a speech in Florida.

While policymakers are doing "very well" on the employment component of their mandate, they are not yet all the way to their 2% inflation target, Barr said. "I think we are in a good position to hold steady and closely watch how conditions evolve."

Markets are widely expecting the FOMC to again hold interest rates steady at its next two meetings scheduled for June and July.