Federal Reserve Governor Lisa Cook has expressed concerns about the path of inflation, cautioning that new tariffs might reverse recent gains and bring uncertainty into future interest rate decisions.

What Happened: Speaking at the Council on Foreign Relations in New York on Tuesday, Cook noted that inflation had cooled in April, with core prices at 2.5% and headline inflation at 2.1% based on the Fed's preferred measure, reported CNBC.

However, she said that these improvements may not last once the impact of tariffs makes its way through the economy. "Price increases tied to changes in trade policy may make it difficult to achieve further progress in the near term," she said.

"The recent post-pandemic experience with high inflation could make firms more willing to raise prices and consumers more likely to expect high inflation to persist," she added.

Cook did not comment directly on President Donald Trump's policies, but stated, "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."

See Also: Trump’s Manufacturing Narrative Weakens As May Data Shows Sharper Contraction, Stubborn Inflation

Why It Matters: Cook's remarks come days before the Federal Reserve's next policy meeting on June 17-18. "I see the U.S. economy as still being in a solid position, but heightened uncertainty poses risks to both price stability and unemployment," Cook said. "When making decisions, I think it has been valuable to remain a student of economic history."

The wider impact of tariffs could spread beyond prices. Cook warned that they may dampen hiring and wage growth, which complicates the Fed's dual mandate of ensuring stable prices and maximum employment.

For now, however, Cook made no prediction about when the Fed might cut rates. "Current policy is set in a place where I and my colleagues can respond to threats on either side of the Fed's mandate," she said.

Another Federal Reserve Governor, Christopher Waller, recently warned that tariffs might cause a short-term spike in prices, while indicating that rate cuts could be possible later in 2025 if trade policies stabilize and the economic outlook improves.

Markets are expecting rate cuts starting in September, as investor caution grows. Meanwhile, JPMorgan Chase CEO Jamie Dimon has raised alarms about potential stagflation, citing fiscal deficits and global instability.

Read Next: April Inflation Print Was The ‘Last Vestige’ Of Pre-Tariff Impact, Fed’s Goolsbee Says

Federal Reserve | Photo courtesy: RozenskiP / Shutterstock