The Governor of the Federal Reserve (Fed) and head of economic policy, Lisa Cook, spoke in a moderated debate at the Annual Conference of the Julis-Rabinowitz Center for Public Policy and Finance, organized by Princeton University in New Jersey.
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Cook believes the risks to meeting employment and inflation targets have been better balanced.
He would like to have greater confidence that inflation is converging towards 2% before he starts cutting rates.
The monetary policy rate will have to change as the prospects for disinflation become more sustainable.
The risk of persistently high inflation has decreased, but not completely disappeared.
The disinflation process has been, and may continue to be, bumpy and uneven.
Consumer spending growth may be affected by deteriorating household financial balances.
Overall, consumer spending has continued to show strong momentum in recent months.
The strong recovery in supply has largely contributed to the recent disinflation.
Cook sees supply chain disruptions likely to increase due to the Red Sea unrest.
The post-pandemic world could be characterized by greater supply volatility.
Core goods inflation is likely to converge towards a slightly negative pre-pandemic trend.
The 12-month CPI forecast seems reasonable, with a perspective of convergence towards the 2% target.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
