Federal Reserve Governor Lisa Cook indicates potential rate hikes if inflation fails to decline toward the 2% target.
Federal Reserve Governor Lisa Cook stated she is prepared to support higher interest rates if US inflation does not continue its downward trend. Cook emphasized that inflation remains too high and risks to the inflation side of the Fed’s dual mandate outweigh those to employment at this stage.
The annual inflation rate fell to 3.5% in June, marking its first decline in five months, while the personal consumption expenditures (PCE) index rose 3.7% over the past year. Both measures remain above the Fed’s 2% long-term target. Cook cautioned against overemphasizing a single data point in an uncertain environment.
Cook warned that prolonged above-target inflation could lead to entrenched price and wage expectations, reinforcing her readiness to act if disinflation stalls. Markets may interpret the remarks as a hawkish signal for monetary policy.