Breaking News
Investing Pro 0
Donate to earthquake relief efforts in Turkey and Syria Donate

Fed's Cook says time nearing to increase rates in smaller steps

Economy Nov 30, 2022 01:58PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Member of the Board of Governors of the Federal Reserve System Lisa D. Cook attends a dinner program at Grand Teton National Park where financial leaders from around the world are gathering for the Jackson Hole Economic Symposium outside Jackson, Wyoming,

By Michael S. Derby

NEW YORK (Reuters) -Federal Reserve Governor Lisa Cook said on Wednesday it could soon be time for the U.S. central bank to take its foot off the gas when it comes to its efforts to lower high levels of inflation.

"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 a speech given to the Detroit Economic Club.

That said, Cook pointed to very aggressive Fed interest rate rises over this year as giving the central bank some space to slow down and take stock of how its policy actions are impacting the economy.

"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."

Cook spoke two weeks before the Fed is due to release its next policy statement. The central bank has moved its short-term target rate up swiftly this year, from the near-zero level in March to the current 3.75%-4.00% range. Beginning in the summer, those increases have come in historically aggressive 75-basis-point increments.

But Fed officials have said in recent comments and other communications that, as they near a final destination for rate rises, it would be a good idea to slow down. Futures markets are currently pricing a half-percentage-point rate hike at the Dec. 13-14 policy meeting, and Fed officials so far have not pushed back against that prospect.

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 favorable 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 U.S. productivity levels are weak but she hopes they will improve over time, and that the U.S. manufacturing sector is healthy.

Cook also said that the negative relationship between short- and long-dated government bond yields may not hold out the negative signal about the outlook many now believe.

While yield curve inversions have a strong track record of coming before downturns, Cook called for "caution and humility" in interpreting market pricing and said that when it comes to the negative spread, "there's no economic reason to believe that this has predictive power" about the outlook.

Cook also said the financial sector has withstood recent challenges well, and trouble in the cryptocurrency sector has not caused broader problems for banks.

Fed's Cook says time nearing to increase rates in smaller steps

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email