Federal Reserve governor Lisa Cook said Wednesday that while she didn't think it was necessary to raise interest rates last week, she's ready to do so if inflation does not come down soon.

"I consider the risks to the inflation side of the dual mandate higher than the risks to the employment side at this point," Cook said in a speech in Alaska.

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

Cook noted that the effects of tariffs on prices are mostly behind us, and while those levies account for higher inflation year over year, they may not prove inflationary looking ahead. Cook said she expects to see price growth from the months when the tariffs were first implemented last year start to drop off, though the path remains uncertain.

She also said that while oil prices have surged due to the conflict in the Middle East, she pointed to forecasts that suggest oil prices will come down by the end of the year. And when it comes to artificial intelligence components that have surged in price, Cook thinks prices will come down as supply chains adjust.

"For these three reasons, I felt it was appropriate not to change rates while we see how these factors evolve," she said.

Read more:ย How jobs, inflation, and the Fed are all related

Cook also noted that while the inflation picture improved modestly in June, she wouldn't put too much weight on a single data point, stressing that inflation is still nearly double the Fed's 2% goal.

The Personal Consumption Expenditures index rose 3.7% in June, down from 4.1% in May. On a "core" basis, which excludes volatile food and energy prices, PCE clocked in at 3.3%, down a tenth of a percentage point from 3.4% in May. Month over month, core PCE increased 0.1%, down from 0.3% in May.

Cooked observed that with five years of above-target inflation, the risk grows that higher inflation may become entrenched in price- and wage-setting behavior, making it harder for the central bank to bring it back down.

"The longer inflation is above target, the more likely this scenario becomes," she warned. "Thus, while we might be able to afford to wait for longer in a different environment, we do not have that luxury in this one."

Read more:ย How the Federal Reserve shapes consumer loan rates

In a 9-3 decision last Wednesday, the Fed held interest rates at the current range of 3.5% to 3.75%, but three regional Fed presidents โ€” Cleveland Fed president Beth Hammack, Minneapolis Fed president Neel Kashkari, and Dallas Fed president Lorie Logan โ€” dissented in favor of a quarter-point hike.

Separately on Wednesday, Kashkari told CNBC that he believes it's time to start slowly raising interest rates to help bring down inflation, though he said he isn't calling for a dramatic increase.

Kansas City Federal Reserve president Jeff Schmid said Tuesday night that inflation is too high and bringing it down will require higher interest rates.

"Given the strength of demand and investment, I do not see the current stance of monetary policy as restrictive," said Schmid, who is not a voting member this year of the Federal Open Market Committee.

Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance, she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X @Jenniferisms and on Instagram.

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