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Two-Sided Risks For Policy - Cook

FED
  • Gov. Cook (permanent voter) offers a two-sided view in rare remarks - see the full speech here.
  • She has tended to stick to financial stability discussions (most recently noting a focus on monitoring vulnerabilities at nonbanks), having last given more monetary policy specific remarks in June.
  • “I see risks as two sided, requiring us to balance the risk of not tightening enough against the risk of tightening too much.”
  • “There is a risk that such continued momentum in demand could keep the economy and labor market tight and slow the pace of disinflation.”
  • “But I am also attuned to the risk of an unnecessarily sharp decline in economic activity and employment. Some parts of the economy are showing strain from tighter financial conditions.”

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