MNI BRIEF: Fed Path Relies On Actual Price Declines - Gov Cook

Federal Reserve Governor Lisa Cook said Thursday the path for the central bank's fed funds rate must be based on whether inflation actually falls in the data rather than just in forecasts, adding that she expects ongoing rate hikes.

"In the current situation with risks to inflation skewed to the upside, policy must be based on whether we see inflation actually falling in the data rather than just in forecasts," she said. "Policy should remain focused on on restoring price stability, which will also set the foundation for a sustainably strong labor market. With inflation running well above our 2% goal, this likely will require ongoing rate hikes and then keeping policy restrictive for some time."

"Inflation remains stubbornly and unacceptably high," Cook said in opening remarks at a community event in Spartanburg, South Carolina. Former Fed officials and economists told MNI this week policymakers will likely be forced to raise interest rates more than their own forecasts suggest because of persistent inflation pressures, but the time still may be nearing for the central bank to slow the pace of those rate increases. (See MNI: Ex-Officials Now See Funds Rate Peak at 5% Or Higher)