MNI: Fed’s Cook Strongly Backed 50BP Cut, Cautious On Jobs
Fed Governor Lisa Cook says she 'wholeheartedly' supported last week's decision.
Federal Reserve Governor Lisa Cook said Thursday she strongly supported the central bank’s half point interest rate cut last week, adding that future moves will depend on the economic outlook and sounding a cautious note on the employment picture.
"In recent months, the upside risks to inflation have diminished, and the downside risks to employment have increased,” Cook said in prepared remarks. “In response to these changing conditions, I wholeheartedly supported” the 50 basis point cut, she said.
Cook said labor demand has moderated over the past year and half, helping to reduce price pressures.
“At the same time, labor supply grew rapidly, and now labor demand and supply are more balanced. While the overall labor market remains solid, it has cooled noticeably this year and is now less tight than it was on the eve of the pandemic,” Cook said.
“As labor demand and supply are now more evenly balanced, it may become more difficult for some individuals to find employment.”
She said the Fed’s rate cut reflected a desire to prevent additional weakness in the labor market. (See: MNI INTERVIEW: Fed Rates Headed To 4% In Quick Order - Bullard)
“That decision reflected growing confidence that, with an appropriate recalibration of our policy stance, the solid labor market can be maintained in a context of moderate economic growth and inflation continuing to move sustainably down to our target,” she said.