Federal Reserve Governor Lisa Cook walks outside the U.S. Supreme Court in Washington, D.C., U.S., January 21, 2026. REUTERS
NEW HAVEN, Connecticut, (Reuters) – Federal Reserve Governor Lisa Cook said on Thursday the war in Iran has shifted the balance of risks for the central bank’s dual mandate of price stability and full employment more toward inflation.
“I see the balance of risks as being largely, on net, in balance, but I would argue that the inflation risk is greater right now as a result of the Iran war,” Cook said at an event at the Yale School of Management.
“With respect to the labor market, I see it as being in balance, but precariously so,” Cook said.
Cook is the latest Fed official to raise concern that the war launched on February 28 by the United States and Israel against Iran is likely to push inflation further above the central bank’s 2% target.
Over the last year, tariffs imposed by President Donald Trump had interrupted the progress that had been made on returning inflation to the targeted pace, Cook said, and the war “takes us even further away.”
Global benchmark oil prices have risen from around $75 a barrel in late February to more than $100 a barrel this month after Iran effectively shut off the flow of about a fifth of the world’s petroleum from being shipped through the strategic Strait of Hormuz.
The Fed last week left its benchmark short-term policy rate unchanged in a range of 3.50%-3.75% and the majority of policymakers then still saw a quarter-point rate cut as their next likely move by year-end. Since then, however, bond markets have reacted to the rise in oil prices and uncertainty over how long the war will last by driving up market-based interest rates, and interest rate futures markets now reflect essentially zero chance of a rate cut this year.
Reporting by Dan Burns in New Haven, Connecticut; Additional reporting by Ann Saphir in Berkeley, California; Editing by Matthew Lewis
