Federal Reserve (Fed) Governor and policymaker Lisa Cook spoke while participating in a moderated discussion at the Annual Conference of the Julis-Rabinowitz Center for Public Policy & Finance, hosted by Princeton University in New Jersey.
- Fed’s Cook believes risks to achieving employment and inflation goals have moved into better balance.
- would like to have greater confidence that inflation is converging to 2% before beginning rate cuts.
- Policy rate will eventually have to change as the disinflation outlook becomes more sustainable.
- The risk of persistently-high inflation has diminished, but not disappeared entirely.
- Disinflationary process has been, and may continue to be, bumpy and uneven.
- Consumer spending growth may face headwinds as household balance sheets deteriorate.
- Consumer spending has generally continued to show strong momentum in recent months.
- A strong supply-side recovery has contributed heavily to recent disinflation.
- Fed’s Cook sees potential for increased supply chain disruptions from Red Sea altercations.
- The post-pandemic world could be characterized by greater volatility of supply.
- Core goods inflation likely to converge to modestly negative pre-pandemic trend.
- 12-month PCE forecast seems reasonable, baseline outlook of convergence on 2% target.