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

Federal Reserve Governor Lisa Cook said she is prepared to support higher interest rates if US inflation fails to come down, a change that can pressure crypto and other high-risk investments.

Cook was speaking at a luncheon hosted by the Anchorage Economic Development Corporation, saying that while some disinflationary forces are in play, she is “prepared to act” if disinflation stalls.

“As I have described, 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,” said Cook. “As such, I am prepared to act by raising rates, if necessary.”

The US Federal Reserve is targeting an annualized inflation rate of 2% over the long run. The annual inflation rate fell to 3.5% in June 2026, the first decline in five months, according to Trading Economics.

However, Cook said she would not put too much weight on a single data point, given a highly uncertain environment, adding that the personal consumption expenditures price (PCE) index rose 3.7% in the 12 months through June, nearly double its 2% target.

“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.”