Federal Reserve Governor Lisa Cook, who previously said the US central bank is focused on addressing inflation that is "much too high", said inflation remains too high.
However, she said it could soon be time for the US central bank to take its foot off the gas when it comes to its efforts to lower high levels of inflation.
Reuters reported her comments:
"Inflation remains much too high" and "as a result, the Federal Reserve must continue to focus on bringing inflation back down to our 2% target," Cook said in prepared remarks for a speech to the Detroit Economic Club.
"Given the tightening already in the pipeline, I am mindful that monetary policy works with long lags," she said.
As the Fed moves toward an "uncertain" stopping point for its rate rises, "it would be prudent to move in smaller steps," she said, adding that "how far we go, and how long we keep rates restrictive, will depend on observed progress in bringing down inflation."
In her remarks, Cook, one of the Fed's newest governors, said "we have begun to see some improvement in the inflation data," though she added that she "would be cautious about reading too much into one month of relatively favourable data" before deciding the high price pressures that have driven the Fed to act are abating.
Cook said the current pace of wage gains is above levels consistent with the Fed's 2% inflation target. She also said US productivity levels are weak but she hopes they will improve over time, and that the US manufacturing sector is healthy.
US Dollar update
The dollar index, DXY, has fallen to 106.29 on the day from a 20-year high of 114.78 on Sept. 28. The greenback is on track for its biggest monthly loss since September 2010 as investors look toward the Fed reaching a peak rate early next year.
Ahead of Fed's chairman, Jerome Powell's speech today, the index has reclaimed the 107 level. Some analysts expect Powell to push back against the notion that a pivot is coming soon given the uncertainty of future jobs and inflation releases.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.