Federal Reserve Board of Governors member Lisa Cook suggested on Wednesday that the central bank may gradually shift its policy rate toward a "neutral stance," as risks to the economy are now "balanced."
During her last speech at the University of Virginia, Cook noted that disinflation and a cooling labor market support this approach.
"If the labor market and inflation continue to progress in line with my forecast, it could well be appropriate to lower the level of policy restriction over time until we near the neutral rate of interest, or the point when monetary policy is neither stimulating nor restricting economic growth. However, if inflation progress slows and the labor market remains solid, I could see a scenario where we pause along the downward path. Alternatively, should the labor market weaken in a substantial way, it could be appropriate to ease policy more quickly," she mentioned.
