A slew of headlines from FOMC member Lisa Cook have been released:
- I would like to have greater confidence that inflation is converging to 2% before beginning to cut the policy rate.
- Believe risks to achieving employment and inflation goals are moving into better balance after being weighted toward excessive inflation.
- I now see two-sided risks" in considering appropriate monetary policy.
- I am now weighing the possibility of easing policy too soon and letting inflation stay persistently high versus easing policy too late and causing unnecessary harm to the economy.
- Believe our current monetary policy stance is restrictive.
- Sees an eventual rate cut as adjusting policy to reflect a shifting balance of risks.
- Risk of persistently high inflation appears to have diminished but has not disappeared.
- "At some point, as we gain greater confidence that disinflation is ongoing and sustainable, that changing outlook will warrant a change in the policy rate."
- Restrictive monetary policy and favorable supply developments have put us in a good position to achieve both sides of FOMC's mandate.
- Should continue to move carefully, maintaining degree of policy restriction needed to sustainably restore price stability while keeping the economy on a good path.
- Disinflationary process has been, and may continue to be, bumpy and uneven, as highlighted by last week's CPI & PPI.
- Intend to monitor incoming data closely for signs disinflation process is continuing.
- Forecast of 12-month PCE inflation converging to 2% target over time still seems reasonable as baseline outlook.
- Housing services inflation should keep slowing this year as slower observed rent increases pass into official data.
- Core services ex-housing inflation should keep easing over time as consumers increasingly resist price increases & labor costs grow more slowly.
- Core goods inflation looks likely to converge to modestly negative pre-pandemic trend.
- Strong supply-side recovery has contributed importantly to the recent disinflation.
- Labor market demand and supply appear in better alignment.
- Consumer spending generally has continued to show strong momentum in recent months.
- Growth in total labor income has slowed to near pre-pandemic rate of about 5% year, which should contribute to moderating consumption.
- Consumer spending growth may face headwinds from deteriorating household balance sheets
- Likely that the post pandemic world could be characterized by greater volatility of supply.
- There is potential for Red Sea shipping disruptions to affect supply more than they have so far
I don't see anything other than sitting on the fence. That cuts are not necessarily just around the corner.
