Federal Reserve Governor Cook Supports Half-Point Rate Cut for 2024
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Fed's Cook says she 'wholeheartedly' supported half-point rate cut
Sept 26 (Reuters) - Federal Reserve Governor Lisa Cook on Thursday endorsed the U.S. central bank's 50-basis-point interest-rate cut last week as a way to address increased "downside risks" to employment. "I whole heartedly supported the decision," Cook said in remarks prepared for delivery to The Ohio State University. "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." Advertisement · Scroll to continue Cook voted with the 11-1 majority at the Fed to reduce the policy rate by a half of a percentage point on Sept 18. Her prepared remarks, mostly about the impact of artificial intelligence on productivity and jobs, did not touch on her views about how much more or how quickly the Fed should cut rates from here. "In thinking about the path of policy moving forward, I will be looking carefully at incoming data, the evolving outlook, and the balance of risks," she said, using the same language the Fed did in its statement announcing the rate cut. Advertisement · Scroll to continue The U.S. labor market remains "solid," she said, but has cooled noticeably this year, with the unemployment rate rising to 4.2% from a low of 3.4%. "As labor demand and supply are now more evenly balanced, it may become more difficult for some individuals to find employment," she said, noting that less-educated and minority workers tend to suffer more from weakening economic conditions. Meanwhile, she said, inflation pressures have eased, running 2.5% in the 12 months through July. That's "notably closer" to the Fed's 2% goal than it was just a year ago, she said. "The return to balance in the labor market between supply and demand, as well as the ongoing return toward our inflation target, reflects the normalization of the economy after the dislocations of the pandemic," she said. "This normalization, particularly of inflation, is quite welcome, as a balance between supply and demand is essential for sustaining a prolonged period of labor-market strength." Reporting by Ann Saphir; Editing by David Gregorio Our Standards: The Thomson Reuters Trust Principles., opens new tab
[2]
Fed's Cook says she 'wholeheartedly' supported half-point rate cut
(Reuters) - Federal Reserve Governor Lisa Cook on Thursday endorsed the U.S. central bank's 50-basis-point interest-rate cut last week as a way to address increased "downside risks" to employment. "I whole heartedly supported the decision," Cook said in remarks prepared for delivery to The Ohio State University. "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." Cook voted with the 11-1 majority at the Fed to reduce the policy rate by a half of a percentage point on Sept 18. Her prepared remarks, mostly about the impact of artificial intelligence on productivity and jobs, did not touch on her views about how much more or how quickly the Fed should cut rates from here. "In thinking about the path of policy moving forward, I will be looking carefully at incoming data, the evolving outlook, and the balance of risks," she said, using the same language the Fed did in its statement announcing the rate cut. The U.S. labor market remains "solid," she said, but has cooled noticeably this year, with the unemployment rate rising to 4.2% from a low of 3.4%. "As labor demand and supply are now more evenly balanced, it may become more difficult for some individuals to find employment," she said, noting that less-educated and minority workers tend to suffer more from weakening economic conditions. Meanwhile, she said, inflation pressures have eased, running 2.5% in the 12 months through July. That's "notably closer" to the Fed's 2% goal than it was just a year ago, she said. "The return to balance in the labor market between supply and demand, as well as the ongoing return toward our inflation target, reflects the normalization of the economy after the dislocations of the pandemic," she said. "This normalization, particularly of inflation, is quite welcome, as a balance between supply and demand is essential for sustaining a prolonged period of labor-market strength." (Reporting by Ann Saphir; Editing by David Gregorio)
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Federal Reserve Governor Lisa Cook expresses strong support for a half-point interest rate cut in 2024, citing economic projections and the need for policy adjustments.
Federal Reserve's Stance on Interest Rate Cuts
Federal Reserve Governor Lisa Cook has publicly expressed her "wholehearted" support for a half-point interest rate cut in 2024. This statement comes as part of the ongoing discussion about the future direction of monetary policy in the United States
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.Economic Projections and Policy Adjustments
Cook's position is based on the Federal Reserve's latest economic projections, which suggest that inflation is on track to return to the central bank's 2% target. These projections, coupled with the anticipated slowdown in economic growth, have led to the consideration of policy adjustments
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.Implications for Monetary Policy
The support for a rate cut indicates a potential shift in the Fed's monetary policy stance. After a period of aggressive rate hikes aimed at combating inflation, the central bank is now considering easing its policy to support economic growth. This change in direction reflects the delicate balance the Fed must maintain between controlling inflation and fostering economic stability
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.Timing and Magnitude of Rate Cuts
While Cook has expressed support for a half-point cut, the exact timing and magnitude of any rate reductions remain uncertain. The Fed's decisions will likely depend on incoming economic data and the evolving financial landscape. The central bank's approach suggests a cautious and data-dependent strategy in managing interest rates
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Market Reactions and Expectations
Cook's comments have garnered significant attention from market participants and economists. The prospect of rate cuts in 2024 has implications for various sectors of the economy, including housing, consumer spending, and business investment. Financial markets are likely to closely monitor further statements from Fed officials for insights into the future path of monetary policy
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.Challenges and Considerations
Despite the support for rate cuts, the Federal Reserve faces several challenges in implementing its monetary policy. These include the need to balance inflation control with economic growth, managing market expectations, and responding to global economic developments. The central bank's decisions in the coming months will be crucial in shaping the economic landscape for 2024 and beyond
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