Fed's Cook Threatens Rate Hike to Combat 'Too High' Inflation

Federal Reserve Governor Lisa Cook has expressed her willingness to raise interest rates if inflation does not start easing in the US economy. Speaking at a recent event, Cook stated that she is prepared to act by raising rates 'if necessary' to deal with 'too high' levels of inflation.

Cook emphasized that the risks to inflation are higher than those associated with job market goals and warned that inflation may become entrenched in price- and wage-setting behavior, making it harder for the Fed to address. She noted that the Fed has limited space to maneuver due to prolonged overshot inflation levels above the 2 percent target.

Cook's comments come after a recent FOMC meeting where rates were kept unchanged despite inflation pressures being well above the target. While some officials, like New York Fed President John Williams and Philadelphia Fed leader Anna Paulson, have signaled openness to raising rates if needed, others have dissented from this view.