Lisa Cook, Speech: Important Questions for Economic Research

Inflation

“The big question, however, is whether, and how quickly, inflation will continue its downward path toward our target of 2 percent. Much of the decline so far has been driven by the moderation in energy prices, and there is evidence that the path back to our low and stable inflation goal could be long and is likely to be uneven and bumpy.”

Jobs

“There are some signs that this strong labor market is softening at the margin. Wage growth has moderated somewhat from the rates reached about a year ago. Indicators of hiring have slowed. Job openings, while still elevated, have declined in recent months. And the quits rate has retraced more than half of its pandemic-era rise, falling from a 3 percent peak in late 2021 to 2.6 percent in February.”

Fed Funds

“Currently, with the federal funds rate target near 5 percent, I am looking at what rate will be sufficiently restrictive to bring inflation down to 2 percent, over time.”

“I am weighing the implications of stronger momentum in the economy apparent in economic indicators over the past few months against potential headwinds from recent banking developments. If tighter financing conditions are a significant headwind on the economy, the appropriate path of the federal funds rate may be lower than it would be in their absence. But if data show continued strength in the economy and slower disinflation, we may have more work to do.”