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Fed Governor Lisa Cook warns she may raise rates if disinflation stalls
Cook said she would be prepared to act if inflation remains above the Fed’s 2% target, citing persistence risks and noting June inflation was 3.5% annually.
Federal Reserve Governor Lisa Cook said she is prepared to support higher interest rates if US inflation fails to keep falling, warning that a stalled disinflation trend could increase the risk of entrenched price and wage setting.
Cook told a luncheon hosted by the Anchorage Economic Development Corporation that she sees higher risks on the inflation side of the Fed’s dual mandate than on employment at this point, and she said she could raise rates if needed. She added that she would not place too much weight on a single data point given uncertainty around the inflation outlook.
The Fed targets an annualized inflation rate of 2% over the long run, and the annual inflation rate fell to 3.5% in June 2026, according to Trading Economics. Cook pointed to the PCE price measure, saying the index rose 3.7% in the 12 months through June, near double the target.
Cook argued that if the Fed does not see signs of continued disinflation soon, the longer inflation stays above target, the more likely it becomes that higher inflation persists and becomes harder to reduce. She also said the prospect of higher rates can pressure crypto and other high risk investments.