Fed Governor Lisa Cook Sees Signs Of Easing Inflation, Says Price Pressures May Come From These Quarters

Federal Reserve Governor Lisa Cook reportedly said inflation in the U.S. has started coming down but price pressures could keep emanating from a tight labor market, the war in Ukraine and the reopening of China.

What Happened: "We certainly see tightening taking place," Cook said on Monday during an event organized by the University of Michigan Economics Department, according to a Bloomberg report.

Also Read: How to Invest in Startups

Given the strength of the labor market, "we are still going to see inflation from that, but we've seen wage gains moderating quite a bit," she said. That suggests the "disinflationary process" is underway, Cook said, adding "we're not there yet."

The recent production cut announcement by OPEC+ is the latest headache for the central bank as it tries to rein in inflation while simultaneously attempting to resolve the banking crisis.

According to the CME FedWatch Tool, the market is considering close to 55% probability of a 25 basis points rate hike in the next FOMC meet.

Dual Mandate: While the central bank has a dual mandate of maintaining price stability and maximum employment, it is "focused on high inflation because the job market seems to be doing okay," Cook said according to the report.

"If at some point there is attention that needs to be paid to one side of the dual mandate then that needs to be done," she said. "That is temporary, but that's the situation we have right now," Cook added.

The Fed Governor said it will be important to observe how much more credit tightens owing to the uncertainty, a shift that could especially hurt small businesses. However, Cook stated a "steep decline in GDP" may not be seen because of that tightening and that officials need to keep monitoring economic data.

Read Next: Tesla, Apple, AMC, Chevron, Nio: Why These 5 Stocks Are Drawing Investors’ Attention Today