Fed Governor Warns Rate Hike Looming if US Inflation Persists

Federal Reserve Governor Lisa Cook warned that she is prepared to raise interest rates if US inflation remains too high, saying it may be necessary to control prices. Speaking at the 2026 Economic Luncheon in Anchorage, Alaska, Cook emphasized the risk of entrenched inflation impacting the economy.

Cook stated that with five years of above-target inflation, the risk grows that higher inflation becomes entrenched in price- and wage-setting behavior, making it harder to attack. The Fed governor also noted that the longer inflation is above target, the more likely this scenario becomes.

Cook's comments come after the Federal Reserve kept interest rates unchanged at a range of 3.5% to 3.75% in its latest decision. While Cook supported keeping rates steady, she acknowledged that consumers feel troubled by several factors, including inflation.