Federal Reserve Governor Lisa Cook said she is “prepared to act” if inflation remains too high above the Fed’s target rate.
Federal Reserve Governor Lisa Cook said she is prepared to support higher interest rates if US inflation fails to come down, a change that can pressure crypto and other high-risk investments.
Cook was speaking at a luncheon hosted by the Anchorage Economic Development Corporation, saying that while some disinflationary forces are in play, she is “prepared to act” if disinflation stalls.
“As 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,” said Cook. “As such, I am prepared to act by raising rates, if necessary.”
The US Federal Reserve is targeting an annualized inflation rate of 2% over the long run. The annual inflation rate fell to 3.5% in June 2026, the first decline in five months, according to Trading Economics.
However, Cook said she would not put too much weight on a single data point, given a highly uncertain environment, adding that the personal consumption expenditures price (PCE) index rose 3.7% in the 12 months through June, nearly double its 2% target.
“If I do not see signs of continued disinflation soon, I am prepared to act,” Cook said.
“With five years of above-target inflation, the risk grows that higher inflation may become entrenched in price- and wage-setting behavior, leading to persistence that would be much harder for us to attack. The longer inflation is above target, the more likely this scenario becomes.”
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