Federal Reserve Governor Lisa Cook He said in his first public remarks on monetary policy since joining the Washington-based central bank’s board that “inflation remains stubbornly and unacceptably high, and data in recent months shows inflationary pressures remain widespread.”
“The generalized nature of inflationary pressures suggests that the economy in general is very tight,” he said.
“The path of policy should depend on how quickly we move towards our inflation target,” Cook said.
Cook said she “fully supported” the large three-quarter point rate hikes approved in her first meetings as governor, and also agreed with the policy of “early” monetary tightening to hasten its impact, and believed the changes Policy decisions should be based on the actual fall in inflation, not on the forecast that it would.
Main comments
”Reestablishing price stability will probably require continued rate hikes, and then restrictive policy for some time.
“It is necessary to maintain the restrictive policy until it is confident that inflation is firmly on the 2% path.”
“Inflation is too high, it will continue until the job is done.”
“I have fully supported advancing the policy at the last three FOMC meetings.”
“Monetary policy being brought forward allows for greater containment and can curb inflation expectations; this precautionary approach is appropriate.”
“At some point it will be convenient to slow down the pace of rate hikes to assess the effects of tightening.”
The labor market is “very strong”, inflation remains “stubbornly and unacceptably high, the economy in general is “very tight”.
“My goal is to bring inflation back to 2%.”
“I focused on the lag between signs of easing in price pressures and the actual decline in inflation.”
“Policy judgments should be based on falling inflation data, not just forecasts.”
“The risk management approach requires a strong focus on taming inflation.”
“It is critical to prevent inflationary psychology from taking hold; I have revised up my assessment of persistently high inflation.”
“There are reasons to expect core goods inflation to slow in the coming months.”
“It cannot be assumed that supply constraints will improve steadily.”
“My colleagues and I are closely monitoring developments abroad, including foreign monetary policy.”
“The repercussions in the financial markets are a two-way street, and there is great uncertainty about its magnitude.”
US dollar update
The focus is on tomorrow’s non-farm payrolls, and then next week the Fed will get the latest report on consumer inflation. On Thursday, despite initial jobless claims, the dollar rose, extending its gains from the previous day. In general, the currency has been volatile and the dollar has struggled to find a clear direction this week, after a dramatic third quarter. The dollar initially fell against most major pairs, before regaining ground:
Source: Fx Street
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