Fed's Cook says she'd support rate hike if disinflation stalls

Federal Reserve Governor Lisa Cook stated at an Anchorage Economic Development Corporation luncheon that she is prepared to support rate increases if disinflationary progress halts. The US central bank targets a 2% annualized inflation rate, but while the annual inflation rate fell to 3.5% in June 2026—the first decline in five months—Cook emphasized that the personal consumption expenditures price index remained elevated at 3.7% over the same period, nearly double the Fed's goal.

Cook said she would not place excessive weight on any single data point given the uncertain environment. However, she warned that five years of above-target inflation risked becoming entrenched in price and wage-setting behaviour, making it harder to control. "If I do not see signs of continued disinflation soon, I am prepared to act," she said, adding that the longer inflation remains above target, the greater the risk of persistence.