Fed Governor Lisa Cook emphasizes upside inflation risks and readiness to raise rates if disinflation stalls, while leaving cuts on the table.
Federal Reserve Governor Lisa Cook indicated that holding interest rates steady remains the appropriate course for now, citing persistent upside risks to inflation. She noted inflation is moving in the “wrong direction” and warned that failure to resume disinflation could prompt a rate hike. Conversely, she would support cuts if the labor market weakens significantly.
Cook’s remarks align with recent Fed communications, which have stressed patience amid sticky inflation data. Earlier this month, policymakers signaled fewer rate cuts in 2024 than previously anticipated. The labor market remains “largely stable,” though downside risks are elevated, she added.
The comments reinforce a hawkish tilt, with markets pricing in a lower probability of near-term cuts. USD strengthened modestly against major currencies following the remarks, while Treasury yields edged higher.