Federal Reserve (Fed) Governor Lisa Cook said on Monday that Fed policymakers could be more cautious with further rate cuts, citing labor market resilience and stickier inflation, per Reuters.

Key takeaways

"Risks to Fed’s inflation and employment goals are roughly in balance."

"US starts the year in strong shape, with a solid job market and growth, and inflation likely to fall gradually to 2%."

"Several reasons including strong business starts, AI investment, to believe productivity growth will continue."

"Private credit, AI, among the areas that could impact financial stability and need to be better understood."

"AI could hold benefits in terms of financial innovation, but also pose risks if models share biases or errors."

Market reaction

The US Dollar Index recover from session lows but remains in negative territory. At the time of press, the index was down 0.5% on the day at 108.38.