Fed's Cook is speaking on the economy and monetary policy and says:
- If labor market and inflation evolve as expected, would be appropriate to continue lowering policy rate towards neutral.
- If inflation progress slows with job market still solid, could see a scenario for pausing.
- Totality of data suggests disinflation still underway with labor market gradually cooling.
- Cuts so far were a strong step toward removing policy restriction.
- Magnitude and timing of rate cuts will depend on coming data, outlook, balance of risks; policy not preset.
- Risks right now are roughly in balance.
- Economy is in a good position, though core inflation still somewhat elevated.
- Elevated core inflation suggests Fed still has further to go.
- Housing services account for most of the excess of core inflation.
- Economic growth robust, expect expansion will continue.
- Job risks weighted to the downside, but have diminished in recent months.
- Slowing wage growth increases confidence in continued disinflation.
- Job market overall remains solid; recent weak growth a result of temporary strike, storm effects.
- Labor market largely normalized, no longer a source of inflation.
- Continued growth with slowing inflation could mean underlying potential is greater than thought.
- Faster productivity growth appears to have supported both potential and actual growth.
Keeps the options open but is confident that inflation will continue to move lower.
A view from WSJ Timiraos:
