Fed's Cook says she is focused on inflation risks

Central bank governor signals she will not support another interest-rate cut until price pressures recede.

Published on Feb. 5, 2026

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Federal Reserve Governor Lisa Cook said she is more concerned about stalled progress on inflation than a weakening labor market, indicating she will not support another interest-rate cut until price pressures that built last year due to tariffs begin to recede. Cook said inflation, which the Fed targets at 2%, has stalled at around 3% at the end of last year after stripping out volatile food and energy prices, and that it is essential the central bank maintain its credibility by returning to a disinflationary path.

Why it matters

Cook's comments signal a hawkish stance on monetary policy, suggesting the Fed will likely keep interest rates steady or raise them further in order to bring down inflation, even if that means risking some weakening in the labor market. This could have significant implications for the broader economy and financial markets.

The details

In remarks prepared for delivery to the Economic Club of Miami, Cook said she sees 'risks as tilted toward higher inflation' and that 'until I see stronger evidence that inflation is moving sustainably back down to target, that is where my focus will be, in the absence of unexpected changes in the labor market.' The Fed cut short-term borrowing costs three times last year, to its current range of 3.50%-3.75%, but Cook said progress on inflation has stalled, running at about 3% at the end of last year after stripping out volatile food and energy prices.

  • The Fed cut short-term borrowing costs three times last year, to its current range of 3.50%-3.75%.
  • Unemployment, at 4.4% in December, is well below the 50-year average of 6.2% that preceded the 2020 COVID-19 pandemic.

The players

Lisa Cook

Federal Reserve Governor who has voted with the majority of Fed policymakers on every interest-rate decision she has taken part in since she started the job in 2002.

Jerome Powell

Federal Reserve Chair.

Donald Trump

Former U.S. President who last year tried to oust Cook over alleged misstatements on her mortgage applications, an effort that she has sued to stop in a case currently before the Supreme Court.

Kevin Warsh

Former Fed governor who Trump has nominated to succeed Powell when his chair term ends in mid-May, in part because Warsh supports the rate cuts that Trump wants.

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What they’re saying

“At this time, I see risks as tilted toward higher inflation.”

— Lisa Cook, Federal Reserve Governor (Reuters)

“Such a plateau is frustrating after seeing significant disinflation in the preceding few years.”

— Lisa Cook, Federal Reserve Governor (Reuters)

“After nearly five years of above-target inflation, it is essential that we maintain our credibility by returning to a disinflationary path and achieving our target in the relatively near future.”

— Lisa Cook, Federal Reserve Governor (Reuters)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

Cook's hawkish stance on monetary policy signals the Fed is likely to keep interest rates steady or raise them further in order to bring down inflation, even if that means risking some weakening in the labor market. This could have significant implications for the broader economy and financial markets.