Fed Governor Lisa Cook sees tariffs raising inflation and complicating rate policy

Federal Reserve Governor Lisa Cook expressed concern Tuesday with the progress on inflation, saying recent lower readings could reverse after tariffs work their way through the economy.

Federal Reserve Governor Lisa Cook expressed concern Tuesday with the progress on inflation, saying recent lower readings could reverse after tariffs work their way through the economy.

In addition, Cook said she expects President Donald Trump’s moves on trade policy could take a toll on the labor market, though she noted that the economy for now is in relatively good shape.

“I do not express views on the Administration’s policies. But I do study the economic implications, which appear to be increasing the likelihood of both higher inflation and labor-market cooling,” the policymaker said in a speech to the Council on Foreign Relations in New York.

On inflation, Cook noted that progress has been made, with core inflation at 2.5% and headline at 2.1% in April, according to a report last week that uses the Fed’s preferred measure.

However, economists largely expect the tariffs to push costs higher. Fed officials generally view tariffs as one-off occurrences for prices, but the broad range of the Trump levies could change the equation.