WASHINGTON — More interest rate increases will be necessary to wrestle inflation under control, Federal Reserve Governor Lisa Cook said Thursday, echoing several tough speeches by other central bank officials this week.
Cook said she has revised her views on inflation in the past several months and now sees it as more persistent. And while real-time, private-sector data is showing signs that inflation could cool in the coming months, the Fed should only slow rate hikes when inflation actually falls, she said.
"With inflation running well above our 2% longer-run goal, restoring price stability likely will require ongoing rate hikes, and then keeping policy restrictive for some time until we are confident that inflation is firmly on the path" back to 2%, she said at the Peterson Institute for International Economics.
Cook's speech, her first as Fed governor, comes after hawkish comments earlier Thursday by Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, and Raphael Bostic, president of the Atlanta Fed, on Wednesday. "Hawks" in Fed-speak typically support higher interest rates to quell inflation, while "doves" are often more focused on keeping rates low to support more hiring.
Wall Street traders have speculated that the Fed may slow the pace of its rate increases soon or even cut them next year, as the U.S. and world economies struggle with higher energy costs and widespread inflation. The Fed is increasing its benchmark short-term rate at the fastest pace in four decades, causing the U.S. dollar to strengthen sharply against other major currencies. A stronger dollar typically draws more capital to the U.S., disrupting overseas economies.
Yet the comments by Cook, Kashkari, and Bostic suggest the Fed is unlikely to slow its campaign against inflation anytime soon. Fed officials have pushed up their short-term rate by a hefty three-quarters of a percentage point three times in a row, bringing it to a range of 3% to 3.25%, the highest in 14 years.
Fed officials projected last month that they would push rates to roughly 4.4% by the end of this year, and 4.6% by early 2023.