Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady

Federal Reserve Governor Lisa Cook emphasized the importance of protecting the central bank’s credibility by ensuring inflation returns to its long-term target, signaling continued caution on monetary policy despite recent rate cuts. Speaking in prepared remarks for an event in Miami, Cook said her primary focus remains on inflation until there is clear and convincing evidence that price pressures are moving sustainably back toward the Federal Reserve’s 2% target.

Cook explained that she supported the Federal Open Market Committee’s recent decision to hold interest rates steady, noting that inflation risks are now “tilted toward higher inflation.” While economic conditions have shown improvement, inflation has remained above target for nearly five years, reinforcing the need for vigilance. According to Cook, achieving a durable disinflationary trend in the near future is essential for maintaining the Fed’s credibility with markets, households, and businesses.

Last week, Fed policymakers kept the benchmark interest rate unchanged in the 3.5% to 3.75% range, following three consecutive rate cuts implemented at the end of 2025. In their statement, officials upgraded their assessment of overall economic activity and labor market strength, suggesting there was no immediate urgency for further monetary easing. Cook aligned herself with other policymakers who have expressed concern that inflation progress has been uneven and that premature rate cuts could reignite price pressures.

Her remarks come amid heightened political scrutiny of the central bank. President Donald Trump recently nominated former Fed Governor Kevin Warsh as the next Federal Reserve chair. Trump has repeatedly advocated for aggressive interest rate cuts, raising concerns among analysts and Fed watchers about the institution’s independence and its commitment to fighting inflation.

Cook did not comment on ongoing efforts by the Trump administration to remove her from the Federal Reserve Board. The issue is expected to be addressed by the Supreme Court in the coming weeks, adding another layer of uncertainty to the central bank’s leadership outlook.

Overall, Cook’s comments underscore the Federal Reserve’s cautious stance, highlighting that restoring price stability remains the top priority even as economic conditions evolve and political pressures intensify.