Fed’s Cook: If inflation progress slows w/ jobs still solid, could see pause

Fed’s Cook is speaking on the economy and monetary policy and says:

• If labor market and inflation evolve as expected, would be appropriate to continue lowering policy rate towards neutral.
• If inflation progress slows with job market still solid, could see a scenario for pausing.
• Totality of data suggests disinflation still underway with labor market gradually cooling.
• Cuts so far were a strong step toward removing policy restriction.
• Magnitude and timing of rate cuts will depend on coming data, outlook, balance of risks; policy not preset.
• Risks right now are roughly in balance.
• Economy is in a good position, though core inflation still somewhat elevated.
• Elevated core inflation suggests Fed still has further to go.
• Housing services account for most of the excess of core inflation.
• Economic growth robust, expect expansion will continue.
• Job risks weighted to the downside, but have diminished in recent months.
• Slowing wage growth increases confidence in continued disinflation.
• Job market overall remains solid; recent weak growth a result of temporary strike, storm effects.
• Labor market largely normalized, no longer a source of inflation.
• Continued growth with slowing inflation could mean underlying potential is greater than thought.
• Faster productivity growth appears to have supported both potential and actual growth.

Keeps the options open but is confident that inflation will continue to move lower.

A view from WSJ Timiraos:

This article was written by Greg Michalowski at www.forexlive.com.