In her remarks on Wednesday, Federal Reserve Open Market Committee member Lisa Cook warned that geopolitical tensions could destabilize commodity markets and the credit system.

In addition, Cook's remarks covered the following points:

The Federal Reserve is keen to monitor those vulnerabilities, given their potential impacts.
Persistent inflationary pressures and unexpected increases in foreign interest rates are among the risks threatening the global financial system.
Further slowdown in economic activity within China could exacerbate financial pressures, with possible indirect effects internationally.
More broadly, worsening geopolitical tensions can lead to a decline in global economic activity, harm global trade flows and financial conditions, which could increase financing and production costs and contribute to greater challenges in more sustainable supply chains and inflationary pressures.
The Federal Reserve must remain vigilant against potential shocks that could worsen vulnerabilities in the global financial system.