Federal Reserve Governor Lisa Cook reiterated her readiness to support interest rate hikes if inflation fails to slow, cautioning that policymakers may not have enough time to wait for price pressures to ease back to the 2% target.

While Cook backed the Federal Reserve's decision to hold rates steady at its July meeting, she warned that the longer inflation remains above the central bank's target, the more difficult it will be to contain in the future.

"If I do not soon see signs of a sustained slowdown in inflation, I am prepared to take action," Cook said during a speech at an event in Alaska on Wednesday. "Inflation exceeding the target for five consecutive years raises the risk of it becoming entrenched in corporate pricing and wage-setting behavior, leading to stubborn price pressures that will be harder to rein in."

Cook's remarks echoed her comments from July 15, when she explicitly stated that the Federal Reserve might need to raise interest rates to curb price pressures.

She noted that factors such as a fading impact from tariffs, potential declines in oil prices, and easing pressures related to the artificial intelligence boom could all help lower inflation, potentially eliminating the need for tighter policy.

Nevertheless, Cook emphasized that her primary focus remains on bringing inflation back to the Federal Reserve's target level.

"If you take away just one point from today's speech, I hope it is that I am firmly committed to restoring price stability," Cook said. "First and foremost, bringing inflation back to target is essential for achieving the dual mandate Congress has given the Federal Reserve."