3 weeks ago
Fed Governor Cook Ready to Hike Rates if Inflation Persists
The United States has something called the Federal Reserve, which helps manage the country's money and keeps an eye on prices in stores.
When prices rise too fast, that is called inflation, and it makes everyday things cost more.
A woman named Lisa Cook works at the Federal Reserve, and she said she is ready to make borrowing money more expensive if prices keep climbing.
When borrowing costs more, people and businesses usually spend less, which can slow down price increases.
Right now, the Federal Reserve decided to leave its interest rates unchanged, at between 3.5 and 3.75 percent.
Prices are still going up, but more slowly than before, dropping from 4.2 percent to 3.5 percent.
The boss of the Federal Reserve, Kevin Warsh, said they are carefully reviewing the economy instead of rushing to change anything.
President Donald Trump wants interest rates to be lower already and thinks the committee is holding Warsh back.
This story is about important adults making big decisions about money that affect everyone.
Federal Reserve Governor Lisa Cook said she is prepared to raise short-term interest rates if US inflation remains "too high."
Cook spoke at the 2026 Economic Luncheon of the Anchorage Economic Development Corporation in Anchorage, Alaska.
The Federal Reserve recently held its federal funds rate at 3.5% to 3.75% after a 9-3 Federal Open Market Committee (FOMC) vote in late July.
US annual inflation was 3.5% for the 12 months ending June 2026, down from 4.2% previously, according to the US Labor Department.
President Donald Trump suggested Fed Chairman Kevin Warsh would like to lower rates but is held back by the FOMC, while Warsh called the decision a "rigorous review" of the economy.
- Who
- Federal Reserve Governor Lisa Cook, with related remarks from Fed Chairman Kevin Warsh and President Donald Trump
- What
- Cook said she is prepared to raise short-term interest rates if US inflation remains too high, while the Federal Reserve recently voted to keep rates unchanged
- Where
- Anchorage, Alaska, at the 2026 Economic Luncheon of the Anchorage Economic Development Corporation
- When
- Wednesday (US time), about a week after the Federal Reserve's late July FOMC meeting and following inflation data released July 14, 2026
- Why
- To bring down inflation, which stood at 3.5% annually in June 2026, and prevent it from becoming entrenched in price- and wage-setting behavior
Federal Reserve majority: hold rates steady
President Trump: cut rates now
Monetary policy direction
Federal Reserve majority: hold rates steady
Cook and the FOMC majority voted to keep rates at 3.5% to 3.75% while monitoring inflation, with Cook saying a hike would be supported only if necessary.
President Trump: cut rates now
Trump favors slashing rates and asserted that Warsh would like to lower them but is being held back by the Federal Open Market Committee.
Inflation outlook
Federal Reserve majority: hold rates steady
Inflation drivers such as tariffs, the war in Iran, and AI-related investment may ease, bringing down price pressures, but there is a risk inflation becomes entrenched.
President Trump: cut rates now
With five years of above-target inflation, the risk grows that higher inflation becomes entrenched in price- and wage-setting behavior, making it harder to control.
Key facts
- Fed funds target rate
- 3.5% to 3.75% (held unchanged)
- FOMC vote
- 9-3 in favor of keeping rates unchanged
- US annual inflation (June 2026)
- 3.5%, down from 4.2%
- Inflation data release date
- July 14, 2026
- Cook's stance
- "I am prepared to act by raising rates, if necessary"
- Speech venue
- 2026 Economic Luncheon of the Anchorage Economic Development Corporation
- Fed chairman
- Kevin Warsh, who called the decision a "rigorous review"
Quotes
Lisa Cook
Federal Reserve Governor
“Inflation may become entrenched in price‑and‑wage‑setting behavior, leading to persistence that would be much harder for us to attack.”
financialexpress.com
“I am prepared to act by raising rates, if necessary.”
financialexpress.com
Sources
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