Federal Reserve Governor Lisa Cook stated on Wednesday that while she believes the U.S. central bank should keep short-term interest rates steady for the time being, she is ready to increase rates if inflation does not subside. In her remarks at a policy forum on artificial intelligence at Stanford University, Cook highlighted that inflation is being driven by factors such as tariffs, rising oil prices due to the ongoing Iran war, and increased demand for technology related to AI. She expressed concern that persistent inflation could become ingrained in wage-setting behaviors, particularly after five years of inflation exceeding the Fed's 2% target. Cook's comments come as the Fed's policy rate is currently held steady in the 3.50%-3.75% range. She noted that while she expects inflation to ease, the risks are still tilted toward higher inflation, indicating a potential challenge for new Fed Chair Kevin Warsh, who is expected to lower rates. Cook also mentioned that the rapid adoption of AI could lead to job losses before any gains, but she remains optimistic about the labor market's stability.