MNI: Fed Gov Cook Sees Soft Landing For US Economy
Unusual circumstances of the pandemic may also lead to a rare soft landing, Federal Reserve Governor Lisa Cook says.
Federal Reserve Governor Lisa Cook said Wednesday the U.S. economy is likely headed for a rare soft landing due partly to the unusual circumstances of the pandemic.
Much of the inflation over the past four years was due to shortages that have since been resolved, and even after tight labor markets took over as the main driver of inflation, there are signs that too is easing, she said.
"In the U.S., what I have seen so far appears to be consistent with a soft landing: Inflation has fallen significantly from its peak, and the labor market has gradually cooled but remains strong," she in remarks prepared for the Australian Conference of Economists in Adelaide, Australia.
"My baseline forecast (and that of many outside observers) is that inflation will continue to move toward target over time, without much further rise in unemployment."
GLOBAL INFLATION
Recent research from the Fed's Board of Governors found the global components of inflation accounted for a large part of the variation in the average inflation around the world during the post-COVID period, Cook said.
As commodity price shocks reversed and economic activity and labor markets normalized around the world, inflation is set to slow toward global central bank targets, she said.
"This persistence and the recent decline in global components of core and noncore inflation suggest that the world disinflationary process will continue," she said.
Cook made no comments about the likely timing of any rate cuts in the U.S. (See: MNI INTERVIEW: Fed Will Stay Patient On Rocky Road To 2%-Evans)