WASHINGTON—Federal Reserve Governor Lisa Cook told an audience in Washington that the central bank is relying more heavily on high-frequency private-sector data as the federal shutdown delays key government releases, noting that real-time indicators still point to a gradually cooling labor market and inflation that remains above target.
She said alternative sources—from job-posting platforms to credit-card spending trackers—have “borne fruit” in helping policymakers gauge economic conditions without official metrics.
At a speech delivered at the Brookings Institution, Cook emphasized that inflation progress has stalled due to tariff-driven price pressures and warned they are likely to keep inflation elevated for another year. However, she views tariff effects as temporary and expects underlying price growth to continue moving toward 2% once those pressures ease. At the same time, she flagged rising financial stress among low- and moderate-income households and uneven labor-market outcomes as signs of a “two-speed economy” that heighten risks if policy missteps occur.
The governor noted that recent economic activity remains solid, supported by resilient consumer spending and particularly strong business investment in AI-related equipment and software. Yet she cautioned that the ongoing shutdown is weighing on output and could push some small federal contractors out of business, even as she described those effects as likely temporary with a rebound expected once government operations resume.
Cook said she backed last week’s quarter-point rate cut and ending the balance-sheet runoff next month, viewing both moves as steps toward policy normalization while keeping financial conditions modestly restrictive. With risks elevated on both inflation and employment, she stressed that monetary policy is not on “a predetermined path,” reiterating that every meeting remains live.