Fed Governor Cook Q&A now, signalled patience is warranted, saying policy is mildly restrictive and inflation progress remains insufficient to justify any near-term move.
Earlier from Cook, from prepared remarks:
Summary:
Cook reinforces “wait and see” stance amid inflation uncertainty
Says policy is mildly restrictive and appropriate for now
Core PCE described as still well above target
Expects goods inflation to fade, but timing uncertain
Avoids comment on legal issues or Fed leadership politics
Federal Reserve Governor Lisa Cook doubled down on a patient, inflation-first policy stance during a question-and-answer session on Wednesday, signalling little urgency to adjust interest rates as policymakers assess the delayed effects of past tightening.
Cook said US monetary policy remains “mildly restrictive” and stressed that now is the right moment for the central bank to step back and observe how economic conditions evolve, citing the long and variable lags through which policy acts on inflation and growth. Her comments reinforced a clear preference for caution rather than pre-emptive easing.
Inflation remains the dominant concern. Cook said the latest core PCE reading was “way above” the Fed’s 2% target, underscoring why policymakers remain reluctant to declare victory on disinflation. While she expressed hope that goods inflation would dissipate relatively quickly, she made clear that sustained evidence would be required before confidence in a renewed disinflationary trend could be restored.
On the labour market, Cook said conditions remain broadly stable but require close monitoring, flagging the potential for rapid shifts even as employment appears roughly balanced for now. She added that weak sentiment alone does not justify a policy response.
Cook also downplayed the relevance of estimates of the neutral rate, or r-star, for day-to-day decision-making, suggesting policymakers are more focused on incoming data than theoretical benchmarks. She noted there is still much to monitor on financial stability, including commercial real estate risks.
Addressing political and legal questions, Cook declined to comment on ongoing legal proceedings and said she would continue to carry out her duties at the Fed. She also avoided commenting on future leadership candidates, saying only that she looked forward to getting to know Kevin Warsh.
