Fed Governor Lisa Cook, in first policy speech since Trump suit, says she’s undecided on Dec. rate cut

Federal Reserve Governor Lisa Cook said Monday she supports the latest rate cut and would be open to more, in her first policy speech since President Donald Trump tried to impeach her.

Trump has kept a relatively low profile since his move to oust Cook on mortgage fraud charges in August, except for court battles that have kept him in his position at the central bank.

In his speech in front of the Brookings Institution in Washington DC, the policymaker laid out his views on the economy and where he thinks monetary policy should go. Overall, he sees the economy as a solid one, with risks to the Fed’s goals of low unemployment and stable inflation.

Cook said he favored the Federal Open Market Committee’s 10-2 vote for the central bank to cut its benchmark interest rate by a quarter point; This was the second meeting in a row where the cut was made.

“I found this decision appropriate because I believe the downside risks to employment are greater than the upside risks to inflation. I see the latest cut in the Fed funds rate as another gradual step towards normalization,” he said.

Trump was prevented by the courts from dismissing Cook due to this incident, which was seen as a very important issue for central bank independence. Although White House officials said Cook lied on forms he filled out for federally guaranteed home mortgages, Cook was not convicted of any crime and was not charged.

Cook cited “typos” on loan applications. He declined to comment on the matter during the Q&A session, saying “it would be inappropriate” while stating that he was “beyond grateful” for the support he had received.

Meanwhile, he also retained his post at the Fed, which cut key federal funds rates in September for the first time since December.

As for the path forward, Cook said he remains in a data-dependent position. FOMC officials had stated in September that an additional cut was likely before the end of the year.

“As always, I determine my monetary policy stance at each meeting based on data from a wide range of sources, the evolution of my perspective and the balance of risks,” he said. “Every meeting, including December, is a live meeting.”

“We definitely want to see whether the tariff effects are permanent, whether companies expect to increase prices and what they do with inventory,” he added. “So there’s a lot to look at. There’s a lot to look forward to as the December meeting approaches.”

Fed Chairman Jerome Powell shook markets by saying a December rate cut was not a sure thing at his post-meeting press conference on Wednesday. Powell noted the broad distribution of views on the committee, which is better known for its consensus approach to policy.

“As we look forward, policy is not on a predetermined path,” Cook said, using the phrase that has become standard language for Fed officials. “We are at a time when the risks to both sides in dual missions are increasing.”

As for inflation, he said Trump’s tariffs have not fully factored into the economy. But he said the most likely outcome would be a “one-off increase” in prices and was unlikely to increase inflation in the long term.