Fed Nominee Lisa Cook Backs Powell’s Policy Path to Tackle Inflation

(Bloomberg) -- Lisa Cook, the first Black woman to be nominated to the Federal Reserve, said she supported steps taken by the U.S. central bank to counter the highest inflation in 40 years but cautioned she'd be “patient” in studying the data.

“I agree with the Fed's path right now as we're speaking,” she told the Senate Banking Committee on Thursday. “But when we get to a decision point, I would look to the data, the evidence, that would be made available at that time.”

Chair Jerome Powell, who Biden has picked for another four-year term at the helm, said last week that officials have penciled in an interest-rate increase at their March meeting.

Cook was flanked by Philip Jefferson and Sarah Bloom Raskin at the hearing in Washington. All three of President Joe Biden's nominees to be Fed governors vowed in their opening remarks to cool inflation. The three will fill out the remaining seats on the Fed's board in Washington, after re-nominating Powell to serve another four-year term as chair and elevating Governor Lael Brainard to be vice chair.

Concern over high inflation has become politically dangerous for the Biden administration, which has had to fight accusations that its spending policies to help the country weather the pandemic have fanned price increases. All three nominees stressed the high cost that price pressures impose on ordinary Americans.

Senator Patrick Toomey of Pennsylvania, the top Republican on the committee, said Cook had refused to endorse the Fed's pullback of its easy money policy during a recent telephone conversation with him and pressed her again on the subject. Cook declined to declare how she would vote on policy in the future.

“What we know is we have to be patient with the data, we have to ask about the data, whether the data have changed, if they're still reliable and still valid,” she said.

The nominees all require confirmation in the Senate, which Democrats control with the thinnest possible margin of 50 seats plus the tie-breaking vote of Vice President Kamala Harris. 

The U.S. central bank is facing pressure to get inflation back down to its 2% target after erroneously forecasting that price pressures would ease. Consumer prices rose 5.8% last year by the Fed's preferred measure, the highest since 1982. Policy makers are trying to patiently remove the massive policy support they enacted to help the economy survive Covid-19.

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