04:05 PM EDT, 07/15/2026 (MT Newswires) -- Inflation is more likely to accelerate than cool given price pressures arising from an artificial intelligence boom and major supply shocks, Federal Reserve Governor Lisa Cook said Wednesday.

While consumer and producer prices decreased last month, the Fed's preferred inflation measure is expected to have increased 3.7% in the 12 months through June, Cook said in remarks prepared for an event in Washington, D.C. The central bank targets 2% inflation, as measured by the personal consumption expenditures price index.

That means inflation has been above the Fed's 2% target for more than five years now, she said.

"If we do not see signs of disinflation soon, I am prepared to act," Cook said.

Risks are skewed toward higher inflation as companies increasingly spend on AI infrastructure and the world navigates supply shocks, she said.

Companies have announced more than $1.5 trillion in data center plans, she said. AI spending "has caused significant price increases for chips, other high-tech equipment, software, and utilities," Cook said.

Meanwhile, tariffs and the Middle East conflict risk keeping inflation higher for longer, she said.

"Economists would expect these shocks to have only one-time effects," Cook said. "But keep in mind that these shocks come as inflation has been elevated relative to our target for five years."

Crude prices plunged in May and June, but have rallied this month as tensions between the US and Iran escalated, potentially putting their preliminary peace deal at risk.

Last month, all Federal Open Market Committee members, including Cook, voted to keep interest rates steady, marking the Fed's fourth consecutive pause. However, Fed officials held diverging views on the appropriate path of interest rates, according to minutes from the central bank's June meeting released earlier this month.

Separately, New York Fed President John Williams said Wednesday that inflation should ease in the next few quarters as energy prices trend back closer to where they were before the US-Iran war began.

In his congressional testimony on Tuesday, Fed Chair Kevin Warsh vowed to curb high inflation, affirming the central bank's commitment to restore price stability.