Fed Governor Lisa Cook said she supported last week’s quarter-point rate cut, describing it as “another gradual step toward normalization.” Cook noted that she views current policy as “modestly restrictive,” which remains appropriate given that inflation is still above target. At the same time, she argued that “downside risks to employment are greater than the upside risks to inflation,” suggesting a tilt toward caution on the growth side of the Fed’s dual mandate.
Cook emphasized that monetary policy is “not on a predetermined path”. She said the economy is at a moment when risks to both sides of the mandate are elevated: keeping rates too high could cause a sharp labor-market deterioration, while cutting too aggressively could risk unanchoring inflation expectations. .
Looking ahead, Cook stressed that each meeting remains a “live meeting,” including December’s. She will base her decision on incoming data and shifts in the economic outlook, particularly regarding labor conditions and inflation persistence.
