Fed Governor Lisa Cook Says Ready to Act with Rate Hikes If Needed

▲ Federal Reserve Governor Lisa Cook

U.S. Federal Reserve Governor Lisa Cook said on the 5th (local time) that she is "prepared to take action with interest rate hikes if necessary," pointing to the risk of persistently high inflation in the U.S.

Speaking at a public event in Anchorage, Alaska, Cook made the remarks, stating, "Inflation remains at an excessively high level, and at this point, the risks to the price stability side of our dual mandate are greater than those to employment."

She emphasized, "While I will consider any potential negative impacts that rate hikes might have on the stability of the labor market and economic growth, I would nevertheless support raising interest rates if necessary to bring inflation down."

Cook previously voted in favor of the majority opinion to keep the benchmark interest rate unchanged at 3.5 to 3.75 percent at the Fed's rate decision meeting on the 29th of last month.

Cook's remarks are interpreted as signaling that she could join the camp favoring rate hikes at future Federal Open Market Committee (FOMC) meetings if inflation does not improve.

Cook noted that it is necessary to closely monitor how the fading impact of tariffs, energy supply shocks stemming from the Iran war, and pressures from the expansion of artificial intelligence (AI) infrastructure will affect prices. She diagnosed that if inflationary pressures originating from these areas ease, they could serve as factors driving inflation down in the future.

Minneapolis Fed President Neel Kashkari, one of the three hawkish officials within the Fed advocating for rate hikes, reiterated his stance that "now is the appropriate time to raise interest rates gradually."

In an interview with CNBC, he pointed out that businesses are posting strong earnings, and both consumer spending and the labor market remain solid, adding, "When I look at these conditions, I have to ask myself what the evidence is that current monetary policy is particularly restrictive."

At last week's FOMC meeting, Kashkari dissented from the decision to freeze interest rates, arguing that rate hikes were necessary, alongside Cleveland Fed President Beth Hammack and Dallas Fed President Lorie Logan.

(Photo: Getty Images)

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