Fed Governor Lisa Cook Warns Interest Rate Hikes Imminent If U.S. Inflation Fails to Ease

Federal Reserve Governor Lisa Cook stated that the U.S. central bank is running out of policy space and stands prepared to raise benchmark interest rates if inflation fails to show sustained movement toward the 2% target. Speaking on economic conditions following recent reports showing annual inflation holding at 3.7%, Cook emphasized that persistent price pressures require strict vigilance. The warning comes as financial markets monitor evolving monetary policy under Fed Chair Kevin Warsh amid ongoing debates over borrowing costs, consumer affordability, and labor market resilience. Higher interest rate projections have heightened volatility across Treasury yields and equity futures, amplifying concerns for mortgage holders, corporate borrowers, and consumers navigating elevated living costs ahead of the autumn economic cycle.