Fed's Cook says inflation is moving in the wrong direction, but she's looking to hold rates steady

May 27, 2026 - 23:41

Federal Reserve Governor Lisa Cook said Wednesday that recent inflation data is moving in the wrong direction, a troubling sign for the central bank's efforts to bring price increases under control. Speaking at an event in Washington, Cook acknowledged that progress on inflation has stalled and that the latest readings show prices rising faster than expected.

Despite the concerning trend, Cook indicated she is not ready to raise interest rates again. She said her baseline expectation is to hold the federal funds rate steady for now, allowing the Fed to wait for more data before making any moves. However, she left the door open to a hike if inflation pressures intensify further.

"We need to be patient and let the data guide us," Cook said. "If inflation does not continue to move down, we could hold rates where they are for as long as needed. And if it becomes clear that progress has truly stalled, we are prepared to raise rates further."

Cook's comments come as several other Fed officials have struck a cautious tone in recent weeks. The central bank has kept its benchmark rate at a two-decade high since last summer, hoping that a period of restrictive policy will cool the economy and bring inflation back to the 2% target. But stubbornly high costs for housing, services, and some goods have complicated that effort.

Markets reacted modestly to Cook's remarks, with traders now pricing in a lower probability of rate cuts in the near term. The Fed's next policy meeting is scheduled for early May, and most analysts expect no change in rates at that gathering.