Fed's Cook Signals Readiness to Hike Rates if Disinflation Doesn't Materialize

Federal Reserve Gov. Lisa Cook said she is prepared to raise interest rates if necessary to bring inflation down, but only when there are clear signs of disinflation.

Cook made her remarks during a speech delivered to the Anchorage Economic Development Corp. in Alaska, where she explained that her decision to support no change at last week's FOMC meeting came down to three factors: tariffs, oil prices and investment in artificial intelligence technologies.

She said that while each of these factors have inflationary potential and have contributed to overall inflation growth this year, she is still waiting for a clear signal that the resulting price shocks amount to a durable and secular increase in prices.

Cook acknowledged that there is a high level of uncertainty around all three areas and they warrant close attention from the FOMC moving forward. She also noted that because inflation has been above the Fed's target for so long, there is an imperative to move sooner than later.