By Howard Schneider
WASHINGTON (Reuters) -U.S. Federal Reserve Governor Lisa Cook said on Monday she considers December’s Fed meeting “live” for a potential rate cut but that she will make her decision based on information from a broad variety of sources between now and then, potentially in the absence of government data delayed by the federal shutdown.
“We are at a moment when risks to both sides of the dual mandate are elevated. Keeping rates too high increases the likelihood that the labor market will deteriorate sharply. Lowering rates too much would increase the likelihood that inflation expectations will become unanchored,” Cook said in remarks prepared for delivery at the Brookings Institution. “As always, I determine my monetary policy stance each meeting based on the incoming data.”
“This is a challenging time to give an economic outlook speech,” she said, citing the lack of fresh government data on jobs, inflation, and economic growth since a federal government shutdown began on October 1.
But “we are not flying blind,” she said, with policymakers and staff combing available administrative sources, private-sector data, and the many surveys the Fed conducts among businesses and households.
That data, she said, so far confirms her sense that inflation will remain “somewhat elevated due to tariff effects and subject to upside risks,” while the job market is “still solid” but cooling and subject to a faster-than-expected decline.
Cook voted in favor of last week’s quarter-point rate cut because it kept policy “modestly restrictive” to fight inflation, and reflected her belief that right now the risks to the job market are greater than the threat of faster-than-expected inflation.
Cook, the first Black woman appointed to the Fed’s Board of Governors, was accused by the Trump administration of misstating information on a home mortgage application and President Donald Trump earlier this year said he was firing her. Cook challenged her removal in federal court, and it has been blocked so far by federal judges.
The case is pending before the U.S. Supreme Court, with a hearing expected in January. She was appointed to the Fed by former President Joe Biden to a term that extends to 2038.
(Reporting by Howard Schneider; Editing by Andrea Ricci)
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