Fed's Cook: Can be more cautious with further cuts given labor market resilience, stickier inflation

Eren Sengezer FXStreet

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.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD appears supported by the 200-day SMA, for now

Following an early pullback to multi-week lows near 1.1670, EUR/USD now manages to reclaim the 1.1700 region as the NA session draws to a close on Monday. The steep retracement in spot follows the equally strong move higher in the US Dollar, as investors continue to assess the geopolitical landscape in the wake of the US and Israel attacks on Iran.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold eases some ground, approaches $5,300

Gold now surrenders part of the earlier advance, reshifting its attenton to the $5,300 zone per troy ounce at the beginning of the week. Indeed, the yellow metal’s firm performance appears propped up by incresing geopolitical jitters in the Middle East, which at the same time fuels the demand for the safe-haven space.