By Howard Schneider and Ann Saphir
WASHINGTON (Reuters) - U.S. inflation remains "stubbornly and unacceptably high," requiring continued interest rate increases to be sure it begins falling, Fed governor Lisa Cook said in her first public remarks on monetary policy since joining the central bank's Washington-based board.
"Inflation remains stubbornly and unacceptably high, and data over the past few months show that inflationary pressures remain broad based," Cook said, concluding that recent improvements in job vacancies, rent and some other data were not enough to conclude the Fed had rounded the corner in its fight against rising prices.
"There are reasons to expect core goods inflation to slow in coming months," and for supply chains to continue improving, she said in remarks prepared for delivery at the Peterson Institute for International Economics.
Still "the widespread nature of the inflation pressures suggests that the overall economy is very tight," she said.
As a result Cook said she "fully supported" the large rate increases of three-quarter points approved at her first meetings as a governor, agreed with the policy of "front-loading" monetary tightening to quicken its impact, and felt changes in policy needed to be rooted in inflation actually falling, not on forecasts of it doing so.
The Fed's "preemptive approach is appropriate. Although lowering inflation will bring some pain, a failure to restore price stability would make it much harder and much more painful to restore it in the future," Cook said. "In the current situation, with risks to inflation forecasts skewed to the upside, I believe policy judgments must be based on whether and when we see inflation actually falling in the data, rather than just in forecasts."
She said that while "at some point" it will be appropriate to slow the pace of increases, she did not hint at her preference for the Fed's upcoming Nov. 1-2 policy meeting.
"The path of policy should depend on how quickly we make progress toward our inflation goal," Cook said.
The Fed receives the latest report on consumer inflation next week.
While Cook said she and her colleagues were "very attuned" to overseas economic developments that could impact the United States, she reiterated that their job is to manage the "domestic mandate" of stable inflation and the maximum level of employment consistent with it.
(Reporting by Howard Schneider; editing by Chizu Nomiyama)