Fed’s Cook: There are risks to easing policy too much or too soon

“There are risks to easing policy too much or too soon as well as too late,” Federal Reserve Governor Lisa Cook said on Monday, per Reuters.

Key takeaways

“Careful approach to easing policy over time can ensure inflation returns sustainably to 2% while striving to maintain strong labor market.”

“Risks to achieving US central bank’s employment and inflation goals moving into better balance.”

“Inflation has fallen considerably; labor market has remained strong.”

“Path of disinflation, as expected, has been bumpy and uneven.”

“Current low rate of increase on new rental leases suggests housing services inflation will continue to fall.”

“Strong productivity growth could mean faster pace of wage growth not inflationary.”

“Could be that some services prices still adjusting to increase in pandemic-era input costs.”

“Comprehensive measures of wage growth show gradual cooling.”

“Wage growth differential between job switchers, those staying in jobs has narrowed.”

“Artificial intelligence a potentially significant source of productivity growth; that will take time.”

Market reaction

The US Dollar stays under modest bearish pressure following these comments. At the time of press, the US Dollar Index was down 0.23% on the day at 104.19.