Federal Reserve Governor Lisa Cook told business leaders in Anchorage, Alaska yesterday that she is prepared to support raising interest rates if inflation does not resume its downward path, warning that U.S. inflation “is just too high” with the personal consumption expenditures price index rising to 3.7% over the last 12 months through June—nearly double the Federal Reserve’s 2% target. Her remarks, delivered at an economic luncheon on August 5, represent a harder line than most Fed officials have drawn recently.
Cook was among the nine members who voted to hold rates steady at the Fed’s July meeting, but three dissenting votes in favor of a hike have raised pressure for a rate increase at the September meeting. J.P. Morgan Wealth Management strategists now expect the Federal Reserve to raise interest rates by 0.25 percentage points at its September meeting, marking a shift from their prior base case of no rate changes in 2026. For homebuyers and homeowners, the prospect of higher borrowing costs comes at a time when the 30-year fixed-rate mortgage already averaged 6.69% as of August 6, 2026.
Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve System on May 22, 2026, and his first months at the helm have been marked by a deeply divided committee grappling with persistent inflation pressures and geopolitical shocks that have kept energy prices elevated.
The hawkish turn
What Cook said—and why it matters
A Fed governor’s explicit warning that time is running out shifts September rate-hike odds higher.
Cook’s statement was unambiguous: “If I do not see signs of continued disinflation soon, I am prepared to act,” signaling she would support a rate hike if inflation doesn’t keep falling. In remarks delivered at an event in Alaska, Cook said she is prepared to respond if evidence of continued disinflation does not emerge soon. She also said inflation has remained persistently high for five years, underscoring the central bank’s growing impatience with elevated price levels.
Cook argued the Fed has limited room left to wait given how long inflation has run above the central bank’s 2% target. Cook says she is ready to support a rate hike if inflation does not ease, warning price risks now outweigh job market risks and that the Fed is running out of room to wait for disinflation to return. The timing of her speech—just over a month before the next FOMC meeting scheduled for September 15 and 16—was not lost on markets.
A governor who voted to hold but is now publicly framing the next hold as contingent is sending a conditional signal, and the condition is the August 12 CPI release. If average hourly earnings read above 3.7% year-over-year on August 7, the Fed’s argument for waiting becomes very thin. Market participants are watching inflation data closely to gauge whether the Fed will follow through with a hike next month.
The inflation picture
The personal consumption expenditures price index has risen to 3.7% over the last 12 months through June, nearly double the Federal Reserve Board’s long-term target of 2%. The federal funds rate stands at 3.50%-3.75% after the July FOMC meeting, where a 9-3 divided vote held policy steady amid June CPI at 3.5% year-over-year—down from May’s 4.2% but still well above the 2% target. Cook told an audience of about 1,300 people that the nation’s inflation rate has been “above target” for five years, and the high inflation risks becoming “entrenched” and much harder to deal with the longer it goes unaddressed.
The divided Fed
A historic split and what comes next
Three dissenting votes at July’s meeting signal a committee at odds over the right path forward.
A divided Federal Reserve left interest rates unchanged at 3.5% to 3.75% at its July meeting, but the dissenting committee members—Beth Hammack, Neel Kashkari, and Lorie Logan—had grown more vocal in recent weeks about what they said was the need to raise rates to contain price pressures. Three dissenters at a single meeting is unusual—the last time the FOMC fractured this visibly was 2016.
In his press conference, Fed Chair Kevin Warsh said the policy committee had a “good family fight” but stressed that the members were unified in their commitment to price stability. The Fed’s so-called “dot plot” of economic projections from its June meeting showed nine members were projecting at least one hike in 2026, while eight others projected rates to remain unchanged, and there was still one dot projecting a rate cut this year.
Cook is not alone in flagging a more hawkish stance—New York Fed President John Williams and Philadelphia Fed President Anna Paulson have both signalled willingness to raise rates if conditions warrant. Two drivers lowered the bar for a September hike: continued supply-chain shocks tied to the ongoing Iran conflict that are keeping energy costs elevated and increased investor doubt about the Fed’s willingness to keep inflation contained after it left rates unchanged in July.
You can read the full text of Cook’s speech on the Federal Reserve’s official website, and track upcoming FOMC meetings on the Fed’s meeting calendar.
Impact on borrowers
What higher rates mean for your mortgage
A September rate hike would push mortgage costs up further—here’s how to plan.
The 30-year fixed-rate mortgage averaged 6.69% as of August 6, 2026, up from 6.66% the previous week. The average 30-year fixed-rate mortgage was 6.69% through Wednesday, up to the highest level since the end of July 2025. A quarter-point Fed rate hike in September would likely push mortgage rates higher still, adding to monthly costs for both buyers and those looking to refinance.
The median monthly payment was $2,191 in June 2026, according to the Mortgage Bankers Association’s purchase applications payment index. Experts seem to agree that rates will hover between 6% and 7% for most of the next few years, with borrowers expected to pay around $3,242 per month for a $400,000 mortgage loan near today’s average rates with a 30-year repayment term.
If you’re planning to buy a home, understand that mortgage rates and your financing options depend heavily on your credit score, down payment, and debt-to-income ratio. Calculating what you can afford at current rates—and building in a buffer for potential increases—is critical. For buyers with limited savings, explore down payment assistance programs that can help you get into a home even when rates are elevated.
If you already own a home and are carrying a mortgage above 7%, refinancing before rates climb further may make sense. Use a mortgage calculator to compare your current payment against what you’d pay at today’s rates, factoring in closing costs. Freddie Mac finds that one additional rate quote saves borrowers about $600 over the loan’s life, up to $1,200 with three, so shop around.
What to do now
If you’re buying: Lock your rate as soon as you have a signed contract. Rates can move quickly, and a September hike would push costs higher. Get pre-approved now to understand your budget. If you’re refinancing: Run the numbers immediately. If you can lower your rate by at least 0.75 to 1 percentage point and plan to stay in your home long enough to recoup closing costs, act before the September meeting. If you’re waiting: Understand that waiting for lower rates is a gamble—home prices may rise if demand increases when rates eventually fall, potentially offsetting any savings from a lower rate.
Quick answers
Fed rate hikes: common questions
When is the next Fed meeting, and will they raise rates?
The next Federal Open Market Committee meeting is September 15-16, 2026. While no decision is final until the meeting, market expectations and statements from Fed officials like Lisa Cook suggest a 25 basis point (0.25 percentage point) rate hike is increasingly likely if inflation data between now and then does not show meaningful improvement. The August 12 CPI release will be a key factor in the decision.
How does a Fed rate hike affect mortgage rates?
The Federal Reserve sets the federal funds rate, which is the rate banks charge each other for overnight lending. While mortgage rates don’t move in lockstep with the fed funds rate, they are influenced by it. When the Fed raises rates, borrowing costs across the economy typically rise, including mortgage rates. A 0.25 percentage point Fed hike could push the average 30-year mortgage rate up by a similar amount or more, depending on market conditions and investor expectations.
Why is inflation still so high?
The personal consumption expenditures (PCE) price index—the Fed’s preferred inflation measure—stood at 3.7% in June 2026, well above the 2% target. Several factors are keeping inflation elevated: ongoing supply-chain disruptions related to geopolitical tensions (particularly the U.S.-Iran conflict) that have pushed energy prices higher, strong consumer demand, wage growth that exceeds productivity gains, and the lingering effects of pandemic-era fiscal stimulus. Fed officials like Cook have warned that inflation has been above target for five years and risks becoming entrenched in the economy.
What does “hawkish” mean when talking about the Fed?
In central banking, “hawkish” describes policymakers who prioritize fighting inflation, even if it means slowing economic growth or risking higher unemployment. Hawks are more likely to support raising interest rates. The opposite is “dovish,” which describes officials who prioritize supporting employment and economic growth, even if it means tolerating higher inflation. Lisa Cook’s recent statements are considered hawkish because she explicitly said she’s prepared to raise rates to bring down inflation.
Should I buy a house now or wait for rates to drop?
There’s no one-size-fits-all answer. Waiting for lower rates carries risk: if rates do fall, more buyers may enter the market, driving up home prices and potentially erasing any savings from the lower rate. If you find a home that meets your needs and you can afford the monthly payment at current rates (including property taxes, insurance, and maintenance), buying now and refinancing later if rates drop may be a sound strategy. Focus on the total cost of homeownership, not just the interest rate. If affordability is tight, explore down payment assistance programs and consider whether a smaller home or a different location might work for your budget.
What is the federal funds rate right now?
The federal funds rate target range is currently 3.50% to 3.75%, set at the Federal Reserve’s July 2026 meeting. This is the rate banks charge each other for overnight loans and serves as a benchmark for many other interest rates in the economy. The Fed has held rates in this range since cutting them in late 2025, but growing inflation concerns have led a majority of Fed officials to signal that at least one rate increase is likely before the end of 2026.