Federal Reserve Governor Lisa Cook said Wednesday that she's ready to support an interest rate hike unless the inflation numbers improve.
"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," Cook said during a speech in Anchorage, Alaska. "As such, I am prepared to act by raising rates, if necessary."
While acknowledging that the June data showed inflation easing thanks largely to a sharp slide in energy prices, the policymaker said there shouldn't be too much read into a single data point, particularly with the pace of price increases running well ahead of the Fed's 2% goal.
Cook was part of a 9-3 majority that voted last week to keep the central bank's benchmark borrowing rate in a range between 3.5%-3.75%. She explained that her vote came from a desire to see how possibly waning impacts from tariffs, an energy supply shock due to the Iran war and pressures from the artificial intelligence buildout impact prices.
"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."
