From CNBC: 2025-06-03 13:15:00

Federal Reserve Governor Lisa Cook expressed concern about inflation progress and the impact of President Trump’s trade policies on the labor market. Cook noted core inflation at 2.5% and headline at 2.1% in April, but economists expect tariffs to push costs higher. Market expects Fed to hold interest rates through September.

Cook highlighted potential challenges in achieving further progress in inflation due to recent trade policy changes. Market-based measures indicate muted expectations for inflation further out. Fed officials expect tariffs to impact prices, potentially leading to difficulty in achieving near-term progress.

Cook’s comments come ahead of the Fed’s next policy meeting in June. Market expectations suggest the central bank will maintain interest rates, with the next potential cut expected in September. Cook did not specify when she thinks the Fed can ease again, emphasizing the need to remain adaptable to threats to full employment and low inflation.

Atlanta Fed President Raphael Bostic anticipates one rate cut this year due to inflation concerns. However, Governor Christopher Waller expects tariffs to have a lesser impact than anticipated, potentially allowing for rate cuts before the end of 2025. Waller’s comments contrast with Cook’s concerns about inflation and trade policy impacts on the economy.

Read more: Fed Governor Lisa Cook sees tariffs raising inflation and complicating rate policy