Lisa Cook
Fed Gov. Lisa Cook

Fed's Cook is on the wires saying:

  • I believe that a soft landing is possible

  • Risks are two-sided, must balance risk of not tightening policy enough against risk of doing too much

  • There’s a risk that continued demand momentum could slow pace of disinflation

  • Small business conditions, housing sector. Lower-income households may be signaling loader stress ahead

  • Also attentive to risk of renewed global economic shocks, including geopolitical and muted growth in China, Europe

  • Fed policies have spillovers abroad

  • Concurrent global central bank tightening may mean each central bank need do a bit

  • Supply chain improvements, drop in commodity prices has also helped inflation's fall

  • Increased multifamily housing supply will contribute to the expected further reduction in inflation

  • Labor supply, demand coming into better balance

Lisa Cook is a Governor on the Federal Open Market Committee and as such as a permanent vote for policy..

The last tightening has been priced out of the market for 2023 after the CPI. The focus is now on rate cut probabilities. March has a 35% probability of a cut, while May is up to 68%.

Fed cut probabilities are increasing