Cook Vows to Act on Inflation with Higher Interest Rates

US Federal Reserve Governor Lisa Cook is prepared to support higher interest rates if inflation does not begin to move lower, she said in a speech. The central bank's top priority remains restoring price stability, despite signs of resilience in the US economy.

Cook stated that 'I have described, inflation is too high, and I consider the risks to the inflation side of the dual mandate higher than the risks to the employment side at this point.' She noted that recent inflation readings remain a concern, citing tariffs, geopolitical developments, and investment related to artificial intelligence as factors influencing the inflation outlook.

Cook also pointed out that many households remain pessimistic due to ongoing inflation, which continues to weigh on purchasing power. The Fed Governor's remarks come at a time when financial markets are closely watching signals from Federal Reserve officials for clues on the future path of US interest rates after the central bank left policy rates unchanged at its latest meeting.