A Federal Reserve governor warns of potential rate increases if inflation fails to ease, citing AI-driven investment and geopolitical pressures.
Federal Reserve Governor Lisa Cook indicated she is prepared to raise interest rates if inflation does not begin to slow soon. Cook emphasized the need for more time to assess inflation trends but stressed risks remain tilted toward higher prices due to AI-related investment booms and tariff pressures.
Cook contrasted the current economic landscape with last year, noting inflation risks now outweigh employment concerns. Inflation remains above the Fed’s 2% target, while the job market shows stability. Other Fed officials, including Christopher Waller, have also hinted at possible rate hikes if disinflation stalls.
The remarks add uncertainty to the Fed’s rate outlook, with investors eyeing potential moves as early as this fall. Markets have reacted cautiously to the hawkish tone, though no immediate policy shift was announced.