Philip Jefferson, Vice Chairman of the Federal Reserve, stated that maintaining price stability and achieving full employment goals helps promote liquidity in the U.S. economy. "In tight labor markets, when individuals move up to higher positions, they make room for new people or lower-educated workers," Jefferson said in a speech prepared for the Economic Mobility Summit hosted by the Philadelphia Fed on Tuesday. This speech comes as Federal Reserve officials begin to refocus on inflation risks, with the ongoing trade disputes between the Trump administration and U.S. trading partners potentially raising prices for thousands of imported goods, thus increasing inflation. Jefferson stated that a tightening labor market could also improve income inequality by raising wages for low-income groups. He said that price stability is crucial to maintaining such progress. "Low and stable inflation can ensure that the nominal wage growth I just mentioned is not eroded in real terms, and also ensure that essential goods remain affordable," he said.