Fed’s Lisa Cook Flags Inflation Risks Amid Steady Growth

U.S. Federal Reserve Governor Lisa Cook said Wednesday that risks remain tilted toward higher inflation. She noted that while the overall path is promising, the Fed is cautious and vigilant, prepared to act if price pressures accelerate.

Labor Market Holds Steady

Cook highlighted a stable labor market following last year’s Fed rate cuts. Employment remains broadly balanced, though the Fed is closely watching the timing mismatch between rising AI investment costs and productivity gains.


Economic Growth Outlook

The U.S. economy is projected to grow slightly above 2% in 2026. Weak consumer sentiment persists among lower- and moderate-income households, but overall activity remains solid.


Policy Focus

Cook stressed the Fed’s priority: ensuring inflation returns to—and stays at—the 2% target. Disinflation may resume as tariff effects fade, but uncertainties, including wage pressures and AI-driven costs, keep the Fed cautious.


Market Response

The U.S. Dollar Index (DXY) rose 0.26% to 97.65, reflecting markets’ focus on inflation signals and Fed vigilance.