By Greg Robb
New Federal Reserve Board Governor Lisa Cook on Thursday said she supports additional interest rate hikes and keeping the benchmark policy rate high enough to dampen growth until the central bank is confident that inflation is “firmly on the path” down towards its 2% target.
“Inflation is too high, it must come down and we will keep at it until the job is done,” Cook told the Peterson Institute for International Economics, in her first speech since joining the Fed in May.
Cook, who was an economics professor at Michigan State University, is the first Black woman to serve on the Fed’s seven-member board of governors.
She was approved in May by a narrow, party line vote of 51-50, with Vice President Kamala Harris casting the decisive vote.
When Cook joined the Fed, the central bank’s benchmark interest rate was below 1%. Since then, the Fed has raised its benchmark rate to a range of 3%-3.25% and the median estimate of Fed officials sees the central bank raising rates up to a range of 4.55-4.75% next year.
In her remarks, Cook said higher interest rates are necessary because inflation remains “stubbornly and unacceptably high.”
And after hitting 40-year highs this summer, inflation has showed a slower decline than she expected, Cook said.
At the same time, “there are reasons to expect core goods inflation to slow in coming months,” Cook said. She pointed out that prices for used cars have declined and new car prices should also moderate.
U.S. stocks /zigman2/quotes/210598065/realtime DJIA +0.55% /zigman2/quotes/210599714/realtime SPX +0.75% were lower on Thursday while the yield on the 10-year Treasury note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -0.35% rose back above 3.8% for the first time this week.