Federal Reserve Governor Lisa Cook stated the central bank is prepared to raise interest rates if inflation does not continue to moderate. Her remarks come after the Fed left its benchmark rate unchanged at 3.5% to 3.75% during the latest policy meeting.
Cook emphasized that inflation risks currently outweigh labor market risks, even as June’s Personal Consumption Expenditures price index showed annual headline inflation at 3.7% and core inflation at 3.3%—both well above the Fed’s 2% target. She warned that “if I do not see signs of continued disinflation soon, I am prepared to act by raising rates, if necessary.”
Cook noted that three FOMC members dissented in favor of an immediate hike, reflecting division inside the committee. She expects some price pressures from tariffs, oil prices, and AI-related investment to ease in coming months, but cautioned that inflation could become entrenched in wage-setting behavior, leaving no room for complacency.
The speech adds to a chorus of Fed officials signaling readiness to tighten further if data doesn’t improve. Chair Kevin Warsh has so far avoided explicit guidance, leaving markets to scrutinize every economic release.
