Federal Reserve Governor Lisa Cook said she is prepared to raise interest rates if inflation continues to rise. In a policy environment where most market participants have been betting on eventual cuts, the explicit mention of hikes in the opposite direction is the kind of statement that tends to make traders spill their coffee.

Cook’s willingness to entertain rate increases underscores a growing concern within the Fed that inflation remains stubbornly above the central bank’s 2% target.

Cook’s evolving hawkish posture

This isn’t the first time Cook has sounded the alarm on inflation. Back on November 3, 2025, she delivered a speech at Brookings where she emphasized her commitment to the 2% inflation target and signaled readiness to act forcefully if prices didn’t cooperate.

Then on February 4, 2026, Cook indicated a preference for holding the policy rate steady while still acknowledging persistent inflation risks.

Cook’s position within the Fed has itself been a source of drama. Her seat has faced legal scrutiny and political challenges, including past removal attempts by the Trump administration that were blocked by courts.

The tokenization subplot

On May 8, 2026, Cook spoke at the Central Bank of West African States Conference in Dakar, Senegal, where she discussed the growing role of tokenized assets in finance.

By her account, the market capitalization of tokenized assets in the US has surged to approximately $25 billion, more than doubling over the prior year. She framed tokenization as a complement to traditional finance rather than a replacement, highlighting its potential for faster cross-border payments and improved collateral mobility.