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.
Key highlights
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.
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