Federal Reserve Governor Lisa Cook warns inflation pressures from tariffs, oil, and AI could delay rate cuts or prompt hikes.
Federal Reserve Governor Lisa Cook stated that keeping interest rates steady remains appropriate for now but cautioned that inflation risks could force a rate hike if price pressures persist. She cited tariffs, the Iran war’s impact on oil prices, and surging AI-related investment as key drivers of stubborn inflation.
Cook noted inflation is moving in the wrong direction, with temporary shocks potentially embedding into wage and price-setting behavior after years of above-target inflation. While the labor market remains stable, she indicated willingness to cut rates if conditions deteriorate, though downside risks are elevated.
The remarks underscore concerns that AI-driven productivity gains may be offset by near-term job losses, complicating the Fed’s policy outlook. Cook’s comments reflect growing unease over inflation’s persistence despite earlier expectations of easing.