Fed member Lisa Cook has stated that the U.S. central bank needs to proceed carefully when deciding when to begin lowering interest rates. Cook pointed out the dangers of easing monetary policy too early or moving too slowly.
Speaking at Harvard University, Cook noted that despite a decline in inflation, it remains high, and the labor market is still robust. She stated, “The risks to achieving our employment and inflation goals are moving toward a better balance.”
Cook emphasized the need for a cautious approach to loosening monetary policy over time, saying, “Fully restoring price stability may require a cautious approach to easing monetary policy over time.”
Highlighting the volatile nature of bringing inflation down to the Fed’s 2% target, Cook underscored that a careful approach to further policy adjustments could help sustainably return inflation to 2% while preserving a strong labor market.
