Fed's Cook: Prepared To Act If We Do Not See Signs of Disinflation Soon
By Jessica Coacci
Federal Reserve governor Lisa Cook said she is prepared to act if the Fed does not see any signs of disinflation soon.
Speaking at an event in Washington, D.C., Cook said she supported the committee's decision to hold rates steady in the Fed's meeting last month, because tariffs and the conflict in the Middle East should result in only short-lived increases in inflation.
Despite softer-than-expected inflation reports that came out this week in the consumer price and producer price indexes, Cook said those measures still reveal readings above the Fed's target of 2%.
"At this juncture, I see it as prudent to give a bit more time to observe how inflation unfolds from here," a published text of her remarks said.
One of the reasons Cook said she remains cautious on inflation is that the artificial intelligence buildout does not show signs of slowing. Second, she worries that the recent supply shock from tariffs and the Middle East conflict will lead to "persistently high inflation."
While textbook monetary policy calls for looking through such supply shocks, Cook said these come as the Fed's inflation target has been over its preferred range for five years.
"If we do not see signs of disinflation soon, I am prepared to act," Cook said.
Anchored consumer inflation expectations signal public confidence in the Fed that is reassuring to get back to their target range, but it does not mean that the Fed could "take our eye off the ball," Cook said.
Fed governor Christopher Waller echoed a similar sentiment earlier this week, noting that anchored expectations assist policymakers in bringing inflation down by allowing them to do so more deliberately.
"I often hear people say that because inflation expectations are anchored, central bankers do not have to respond to above-target inflation. This view is wrong," Waller said on Monday.
Write to Jessica Coacci at jessica.coacci@wsj.com
(END) Dow Jones Newswires
July 15, 2026 14:13 ET (18:13 GMT)
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