Cook Signals Rate Hikes If US Inflation Fails to Cool

Federal Reserve Governor Lisa Cook has warned that she is prepared to consider raising short-term interest rates if inflation in the United States does not begin to ease. According to her remarks at the 2026 Economic Luncheon in Anchorage, Alaska, inflation risks outweigh those facing the labor market.

Cook noted that the Fed has limited room to combat inflation, given its prolonged overshooting of the 2% target. The Personal Consumption Expenditures (PCE) price index shows inflation stood at 3.7% compared with a year earlier in June.

She emphasized that bringing inflation down may still be achievable and that the Fed will consider how raising rates would affect the broader economy if necessary.