Federal Reserve Governor Lisa Cook has signaled she is prepared to support higher interest rates if the effort to lower US inflation stalls, a policy shift that could apply pressure to cryptocurrencies and other high-risk investments.

During a luncheon hosted by the Anchorage Economic Development Corporation, Cook explained that while some disinflationary forces are currently at play, she is “prepared to act” if that progress halts.

“As I have described, inflation is too high, and I consider the risks to the inflation side of the dual mandate higher than the risks to the employment side at this point,” Cook stated. “As such, I am prepared to act by raising rates, if necessary.”

The long-term objective of the US Federal Reserve is to maintain an annualized inflation rate of 2%. In June 2026, the annual inflation rate registered its first decrease in five months, dropping to 3.5%, as reported by Trading Economics.

Despite this, Cook warned against giving too much weight to a single data point, especially within a "highly uncertain environment." She highlighted that the personal consumption expenditures price (PCE) index, a key inflation measure, climbed 3.7% in the 12 months leading up to June, which is almost double the Fed's 2% target.

“If I do not see signs of continued disinflation soon, I am prepared to act,” Cook reiterated.

She elaborated on the potential consequences of sustained high inflation. “With five years of above-target inflation, the risk grows that higher inflation may become entrenched in price- and wage-setting behavior, leading to persistence that would be much harder for us to attack,” Cook said. “The longer inflation is above target, the more likely this scenario becomes.”