Cook Signals Fed Preparedness to Hike Rates Amid Persistent Inflation

US Federal Reserve Governor Lisa Cook has emphasized that the central bank remains committed to restoring price stability, and she is prepared to support higher interest rates if inflation does not begin to ease. In a recent speech, Cook stated that inflation continues to run above the Fed's 2 per cent target, and she considers the risks to the inflation side of the dual mandate higher than the employment side at this point.

Cook noted that while some factors may help ease price pressures over time, recent inflation readings remain a concern. She highlighted tariffs, geopolitical developments, and investment related to artificial intelligence as influencing the inflation outlook, emphasizing that the Fed must ensure inflation expectations remain anchored.

The Fed Governor also acknowledged the resilience of the US economy and labour market, saying there has been little evidence that rapid advances in artificial intelligence have resulted in widespread job losses. However, she also noted that many households remain pessimistic due to inflation's impact on purchasing power.