Latest news with #LisaCook
Free Malaysia Today
3 days ago
- Business
- Free Malaysia Today
US tariffs may hamper efforts to cool inflation, says Fed official
April data showed the PCE price index increased 2.1% year-on-year, narrowly exceeding the Federal Reserve's 2% inflation target. (Reuters pic) WASHINGTON : Shifts in US trade policy could hold back further progress in lowering inflation, a senior US central bank official said Tuesday, as President Donald Trump's sweeping tariffs ripple through the economy. The US economy is 'still on a firm footing, but uncertainty has notably increased since the beginning of the year,' Federal Reserve governor Lisa Cook told a Council on Foreign Relations event in New York. While the ultimate level of Trump's tariffs remains unknown as policy changes are ongoing, 'the effects are already noticeable,' she said. In particular, Cook warned of higher inflation and a jobs market cooldown. Price increases tied to policy shifts, in turn, 'may make it difficult to achieve further progress in the near term' when it comes to inflation, she added. Typically, the Fed holds interest rates at a higher level if inflation is elevated and when inflation is low, the central bank can cut rates to boost economic activity. For now, the Fed's preferred gauge of inflation – the personal consumption expenditures price index – rose 2.1% from a year ago in April. This was down from a month prior, but slightly above the central bank's longer-run 2% target. In a separate address in Iowa, Chicago Fed president Austan Goolsbee cautioned that encouraging inflation figures were 'old news,' saying they were the last reports before the effects of Trump's tariffs. 'Are the tariffs going to have a small impact?' he said. 'We gotta wait and see what happens.' Cook added that 'the economic environment could become highly challenging for monetary policymakers.' Besides changes to economic policy, the response of financial markets, businesses and consumers suggest risks to both price stability and unemployment, she noted. 'The recent post-pandemic experience with high inflation could make firms more willing to raise prices and consumers more likely to expect high inflation to persist,' she said.
Reuters
3 days ago
- Business
- Reuters
Fed's Cook sees evidence of trade policy weighing on economy
NEW YORK, June 3 (Reuters) - Federal Reserve Governor Lisa Cook said on Tuesday that U.S. monetary policy is in a good place to respond to different economic scenarios as the Trump administration's trade policy is starting to weigh on the economy. "I see the U.S. economy as still being in a solid position, but heightened uncertainty poses risks to both price stability and unemployment," Cook said in the text of a speech prepared for delivery to a Council on Foreign Relations event. "There is evidence that changes to trade policy are starting to affect the economy" and "I anticipate a slowdown in the expansion of economic activity from last year's pace," Cook said. She tied trade policy to drops in manufacturing output and some types of orders for big-ticket factory goods, as well as a pullback in investment as firms navigate a very uncertain outlook. The Fed is expected to hold its benchmark interest rate steady in the 4.25%-4.50% range at its next policy meeting on June 17-18. Many economists as well as Fed officials believe inflation and unemployment are likely to rise, clouding the central bank's policy outlook. The Trump administration's halting and erratic tariff policy also is complicating the monetary policy outlook. Cook said trade policy actions "appear to be increasing the likelihood of both higher inflation and labor–market cooling." But as things currently stand, "the U.S. economy is still on a firm footing." She did not give much guidance about where she would like interest rates to head over the remainder of the year, noting "the current stance of monetary policy is well positioned to respond to a range of potential developments." Cook said she is committed to keeping long-term inflation expectations steady. She added, "as I consider the appropriate path of monetary policy, I will carefully consider how to balance our dual mandate, and I will take into account the fact that price stability is essential for achieving long periods of strong labor market conditions." She also noted that in the current situation firms may be more willing to raise prices given the experience they had during the COVID-19 pandemic and its immediate aftermath.
Bloomberg
3 days ago
- Business
- Bloomberg
Fed's Cook Underscores Importance of Price Stability for Economy
Federal Reserve Governor Lisa Cook said she sees tariffs as potentially stoking inflation and weakening employment, yet underscored the importance of price stability when considering future interest-rate adjustments. 'As I consider the appropriate path of monetary policy, I will carefully consider how to balance our dual mandate, and I will take into account the fact that price stability is essential for achieving long periods of strong labor market conditions,' Cook said Tuesday in prepared remarks for an event organized by the Council on Foreign Relations in New York.
Arabian Post
26-05-2025
- Business
- Arabian Post
Why smart individual investors are looking beyond stocks
If you've spent the past few months watching the Trump tariff drama unfold, AI stocks become volatile and listening to everyone from your broker to your barista talk about rate cuts and inflation, you might think the only path to investment success in 2025 runs through stocks. But quietly, away from the hype, a growing number of individual investors are making a different move: they're locking in perhaps 5–6% yields from something that doesn't flash on your phone every minute or swing 4% a day. They're buying corporate bonds. ADVERTISEMENT No, they're not glamorous; and no, they won't double in price overnight. But for investors looking for steady income, less stress, and real returns above inflation, corporate bonds are increasingly hard to ignore. Today, the yield on a high-quality (Aaa-rated) corporate bond is around 5.67%, according to Moody's data as of May 22. Even Baa-rated investment-grade bonds are yielding over 6.1%. By comparison, the 10-year US Treasury yield is hovering around 4.5%. And many dividend stocks still yield less than 2%. So, if you can get 5–6% from the bonds of companies like Johnson & Johnson or Procter & Gamble—businesses that have weathered wars, pandemics, and recessions—that starts to look like a pretty solid deal. The backdrop matters. The Federal Reserve has so far held rates steady in the 5.00% range through 2025, and while markets earlier priced in cuts by July, that timeline has been pushed back. Fed officials, including Governor Lisa Cook and Vice Chair Philip Jefferson, have recently emphasized the need for 'greater confidence' that inflation is under control before easing policy—making a July cut unlikely. Meanwhile, inflation is easing but still sticky. The Consumer Price Index rose 2.3% year-on-year in April, while core inflation remains higher at 2.8%, still above the Fed's 2% target. Growth has also cooled: US GDP contracted by 0.3% in Q1, marking the economy's first negative print since 2022. At the same time, the fiscal picture is worsening. The White House's FY2025 budget request includes $849.8 billion for defence spending alone, while the broader discretionary budget proposes multi-year infrastructure investments that push total federal obligations sharply higher. According to the Congressional Budget Office, US federal debt held by the public is projected to reach 116% of GDP by 2034—and independent forecasts suggest it could exceed 130% within the decade if current spending trends persist. That raises an uncomfortable but increasingly relevant question: could high-quality corporate bonds be more reliable than government debt? It's not as far-fetched as it sounds. Over the past few years, corporate America has quietly cleaned up its balance sheet. Many companies refinanced at low rates during the pandemic, extended maturities, and built cash reserves. According to S&P Global, less than 7% of high-yield US corporate debt matures before 2027, offering insulation against short-term refinancing pressure. Let's not forget what we've seen this year. In April, markets briefly wobbled after the Iran–Israel drone exchange. Then came renewed tension in the Taiwan Strait. Oil prices jumped. Equities dipped. But investment-grade bond spreads barely moved. This kind of resilience matters, especially for individual investors who want a portfolio that can absorb shocks. Of course, bonds come with trade-offs. Prices can dip when rates rise, and lower-rated bonds carry more risk. But with rate cuts now a matter of when, not if, the direction of travel for bond prices in 2025 likely tilts upwards, offering potential capital gains on top of attractive yields. More importantly, corporate bonds pay you to wait. They deliver consistent income in a market where growth expectations are getting murkier and stock valuations are starting to look stretched. For investors nearing retirement, or those just tired of chasing performance, that kind of predictability is worth more than ever. Nigel Green is deVere CEO and Founder Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
Yahoo
23-05-2025
- Business
- Yahoo
Fed's Cook Sees Signs of Stress in Subprime Borrowers
Federal Reserve Governor Lisa Cook says the economic vulnerabilities from overall household borrowing are moderate. Speaking at the Seventh Annual Women in Macro Conference in New York, Cook also says a large income shock could trigger higher losses for lenders. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
