Central Banks
Fed’s Cook Says Smaller Rate Moves May Be Prudent Given Lags
- Governor says interest-rate level hinges on inflation progress
- Official says Fed will ‘keep at it until the job is done’
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Federal Reserve Governor Lisa Cook said it would be prudent for the US central bank to make smaller interest-rate moves as it determines how high it will need to go to tame price gains, while the ultimate level will depend on progress with curbing inflation.
“What policy rate is sufficiently restrictive we will only learn over time by watching how the economy evolves. Given the tightening already in the pipeline, I am mindful that monetary policy works with long lags,” Cook said Wednesday in remarks prepared for an event with the Detroit Economic Club. “Thus, as we get closer to that uncertain destination, it would be prudent to move in smaller steps.”