Federal Reserve Governor Lisa Cook reiterated on Wednesday that she is prepared to support further interest rate increases if inflation does not continue to slow, warning that the longer inflation stays above the 2% target, the less time the Fed may have to wait before the difficulty of controlling it escalates.

Speaking at an event in Alaska, Cook noted that while she voted to hold rates steady at the July policy meeting, she would be ready to act if she does not see signs of inflation continuing to ease in the near term. "If I do not see sustained progress on inflation in the near term, I am prepared to act," Cook said. "Inflation has been above target for five consecutive years. Over time, persistently higher inflation could become embedded in business pricing and wage-setting behavior, making it stickier and significantly harder for us to bring it under control."

Cook's latest remarks align with her speech on July 15, where she had already made clear that the Federal Reserve may need to raise interest rates further to curb persistent price pressures. So far this year, the Fed has kept the federal funds rate target range between 3.5% and 3.75%. However, a growing number of policymakers are signaling a hawkish stance, arguing that additional tightening of monetary policy will be necessary to push inflation back down to the 2% target.

Cook also pointed to factors that could help cool inflation, including the waning impact of tariffs, potential room for international oil prices to decline, and some easing of price pressures from the artificial intelligence (AI) investment boom. These developments could help inflation continue to retreat, reducing the need for further policy tightening. However, she emphasized that the Fed's most critical task remains restoring price stability.

"If there is only one thing you take away from my remarks today, I hope it is that I am firmly committed to restoring price stability," Cook said. She added that bringing inflation back to the 2% target is the primary and most important task in achieving the Fed's dual mandate. Only by first achieving price stability, she argued, can the Fed better fulfill its dual responsibilities from Congress to promote maximum employment and maintain stable prices.