Rise in geopolitical tensions could harm commodity, credit markets: Fed's Cook

A rise in geopolitical tensions across the world could have an adverse impact on commodity markets and on access to credit, particularly in a higher interest rate environment, Federal Reserve Governor Lisa Cook said on Wednesday.

“We’ve experienced these geopolitical tensions that you’re talking about, and certainly any shock could make the situation worse that we’re already (in)… and could be destabilizing to commodity markets, could be destabilizing to the system of credit,” Cook said during a panel discussion at a conference hosted by the Central Bank of Ireland in Dublin.

“We are watching and waiting. We’re being vigilant and that’s what we do. We identify, assess and monitor these vulnerabilities that I mentioned.”

Cook’s comments followed a speech in which she outlined in more detail a number of international risks, including tensions in Russia and the Middle East, as well as persistent inflationary pressures abroad and a further economic slowdown in China, that she said could threaten global financial stability.

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