Fed's Cook: inflation too high for five years, hitting rural households harder

Victoria Shinder01 October 2026, 07:222 min read

Federal Reserve Governor Lisa Cook said on 30 September that inflation "has been too high for too long", having exceeded the Fed's 2% target nationally for more than five years. Speaking at the Investing in Rural America conference in Asheville, North Carolina, she confirmed that she voted with the rest of the FOMC to raise rates by 25 basis points at the September meeting, and said she is committed to returning inflation to target while preserving the strength of the labour market.

Most of the speech looked at how the dual mandate plays out outside cities. Nationally, Cook described the labour market as largely stable, with low unemployment and low jobless claims, and hiring more modest than earlier in the expansion though employment gains picked up over the summer. The roughly 20 million rural workers, about one in eight in the country, see broadly similar dynamics, but job creation over the past four years or so has tilted toward urban areas, and labour force participation among working-age men is lower in rural communities.

On inflation, the rural picture has differed. Before the pandemic, rural inflation ran somewhat below urban inflation; in the early recovery, the cost of living in rural areas rose faster. Cook pointed to two drivers. Energy weighs more heavily because of longer distances: transport accounts for about a quarter of rural household spending, against less than a fifth for urban households. And housing costs rose faster: research she cited found home values in non-metro counties, smaller metros and low-density suburbs rose about 36% between March 2020 and March 2023, against 21% in the densest urban counties. In counties with many vacation homes, prices rose 47% in three years. Since 2023, she said, rural housing inflation has moved back toward pre-pandemic patterns.

She also highlighted small businesses: 4.3 million in rural America, more than 96% of rural establishments, employing 7.4 million people, with 30% of them less than three years old according to the Fed's latest Small Business Credit Survey.

Why it matters

Cook is not signalling a new move, but her statement that inflation has run above target for more than five years supports the September hike. Her point about transport costs also means an energy shock lands hardest where incomes are often lower.