Feb 8, 2023
Fed’s Cook Says More Rate Hikes Needed to Curb Inflation
(Bloomberg) -- Federal Reserve Governor Lisa Cook said the US central bank was acting forcefully to curb inflation, though tightening policy in smaller steps was the right thing to do as officials move forward.
“We are determined to bring inflation down to our target,” Cook said Wednesday in Washington at an event hosted by the Joint Center for Political and Economic Studies. “So I think we are not done yet with raising interest rates, and we will need to keep interest rates sufficiently restrictive.”
Fed officials lifted their benchmark interest rate by a quarter percentage point to a range of 4.5% to 4.75% last week. The smaller move followed a half-point increase in December and four mammoth 75 basis-point hikes prior to that.
“We are now moving in smaller steps,” Cook said. “This will give us time to evaluate the effects of our fast actions on the economy.”
Read more: Powell Says Further Rate Hikes Needed and Bonds Take Heed
Cook’s comments follow remarks Tuesday by Chair Jerome Powell that further rate hikes are needed to curb inflation and that a much stronger than expected January employment report shows that the process of squeezing price pressures out of the economy is going to take some time.
Officials in December forecast rates peaking at 5.1% this year, according to their median projection. They will update those forecasts next month. US central bankers are battling to lower inflation to their goal and they’re still a ways off. Prices climbed by 5% in the 12 months through December, according to the Fed’s preferred measure.
“We are committed, I am committed, to getting inflation back down to our 2% target and we’ll stay the course until we accomplish this goal,” she said.
(Add more Cook comment in final paragraph. An earlier version of this story was corrected to correct the name of event host in second paragraph.)
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