Fed’s Cook: January job gains increase hopes for soft landing

By Howard Schneider

WASHINGTON (Reuters) – The strong January job gains of half a million new positions coupled with moderating wage growth has increased hopes for a “soft landing” as the Fed continues with interest rate increases but the labor market powers ahead, Federal Reserve Gov. Lisa Cook said on Wednesday.

Cook said the Fed was determined to return inflation to the 2% target with further interest rate increases, but “I believe this can be accomplished without a large increase in unemployment,” Cook said at an appearance organized by the Joint Center for Political and Economic Studies, a Washington think tank focused on issues important to the Black community.

The unemployment rate unexpectedly fell to 3.4% in January, and “it is possible the path of unemployment will be lower,” than the 4.6% Fed officials in December projected for the end of this year.

(Reporting by Howard Schneider)