Cook (Fed) reiterates the need to be "cautious" when lowering interest rates

MADRID, 25 Mar.

Cook (Fed) reiterates the need to be "cautious" when lowering interest rates


The member of the board of governors of the Federal Reserve (Fed) Lisa Cook has stated that the institution responsible for US monetary policy must be "cautious" when adjusting interest rates, even though the risks to employment and inflation are converging.

"The risks to achieving our employment and inflation goals are becoming better balanced," Cook said at an economics conference held at Harvard University. "However, fully restoring price stability may require a cautious approach in easing monetary policy over time," she added.

In this sense, Cook has indicated that the disinflation process has been "even and uneven", which justifies, even more so, caution regarding monetary policy to combine the return of inflation to the 2% objective with a market "solid" work.

At its meeting last week, the Fed kept interest rates unchanged at their highest level since January 2001 for the fifth consecutive time.

Furthermore, in their macroeconomic forecasts, the members of the Federal Open Market Committee (FOMC) advanced that rates could be lowered up to three times this year, although a significant number of them believed that two or fewer cuts would end up being undertaken. Two, in fact, predicted that they would not change throughout 2024.

The president of the Atlanta Federal Reserve, Raphael Bostic, a voting member of the FOMC, predicted this Monday a single rate cut for this year.