Speech by Governor Cook on the outlook for the U.S. and Alaskan economies - Federal Reserve Board
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August 05, 2026
Outlook for the U.S. and Alaskan Economies
Governor Lisa D. Cook
At the 2026 Economic Luncheon of the Anchorage Economic Development Corporation, Anchorage, Alaska
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Thank you, Jon, for that kind introduction. It is an honor to be here in Alaska. I appreciate the invitation from the Anchorage Economic Development Corporation to meet with you all today.1 As many of you know, I have spent the majority of my career as an academic economist and professor. I have a deep, longstanding love for data and information. At the Federal Reserve, I have the privilege to have the best and most timely data at my fingertips. Yet, there is no substitute for the information researchers—and policymakers—can gain from real-world interactions. This is a main reason I am delighted to be here today—not only to share my own view of how I see the economy developing but, just as importantly, to hear from all of you and to learn about how monetary policy affects your lives, careers, and businesses here in Alaska.
Specifically, today I would like to share my economic outlook for the U.S. and then drill down a bit further to discuss what the data tell me about Alaska's economy. Finally, I would like to focus on one type of data I watch closely, consumer sentiment data.
Outlook
I view the U.S. economy as remaining resilient and growing at a solid pace. Inflation continues to be stubbornly high and has exceeded the Federal Open Market Committee's (FOMC) 2 percent target for more than five years. Meanwhile, the labor market appears to be stable, in a low-hire, low-fire environment.
Thinking first of the price-stability side of our mandate, my assessment is simple: Inflation is too high. This has been my long-held view, and I have noted that inflation has moved significantly away from our target over the past year.2 The inflation picture improved modestly in June, the most recent month for which we have data. However, I would not put too much weight on a single data point, especially in what remains a highly uncertain environment. The personal consumption expenditures price (PCE) index rose 3.7 percent in the 12 months through June. That is nearly double our target. Elevated energy prices due to the conflict in the Middle East have contributed significantly to inflation over the past year, but it is not the only factor. Core prices, which exclude food and energy costs, rose 3.3 percent over the same period.
This year has brought two unexpected sources of price pressure: The Middle East conflict has driven the cost of energy and certain other goods higher, and companies are ramping up capital spending to build out artificial intelligence (AI) infrastructure.3 That investment wave has lifted prices for semiconductors, high-tech equipment, software, and utilities. Taken together, these developments have shifted the balance of risks toward inflation and away from the labor market.
On the other side of the dual mandate, the labor market has remained resilient over the past year. In June, the unemployment rate was 4.2 percent. That rate has barely changed from a year earlier and aligns with what many economists believe is the natural rate of unemployment. Job growth over the past year has been modest. However, it picked up during the spring months, averaging more than 100,000 jobs added per month in the April through June period. Although the hiring rate is low, the unemployment rate remains steady because layoffs are also low. Initial claims for unemployment benefits have trended at historically low levels for several years.
The low-hire, low-fire equilibrium hits some groups, including new entrants, especially hard and may restrain worker sentiment for good reason....