Governor Cook says she may raise rates inflation stays high

Federal Reserve Governor Lisa Cook said on Wednesday, August 5, that she is prepared to support raising interest rates if inflation does not show clear signs of easing, highlighting the central bank's ongoing struggle to return price growth to its 2% target. Cook delivered the remarks in a speech to the Anchorage Economic Development Corporation in Alaska, following last week's decision by the Federal Open Market Committee to hold the benchmark federal funds rate steady in a range of 3.5% to 3.75%.

Cook, who voted with the majority to keep rates unchanged, stated that inflation remains too high, with the personal consumption expenditures price index showing annual inflation at 3.7% in June. She emphasized that the risks to the inflation side of the Fed's dual mandate currently outweigh the risks to its employment goals. "If inflation doesn't start to cool off, I am prepared to act by raising rates, if necessary," Cook said. She added that she would support an increase "if it becomes necessary to bring inflation down."

The governor explained her recent vote for inaction by pointing to three key factors influencing the inflation outlook: tariffs, geopolitical developments...