Fed Governors Highlight AI Risks And Opportunities: Here's What Cook Said About AI-Caused Unemployment Spell And Inflationary Pressure

Federal Reserve Governors Lisa D. Cook and Christopher J. Waller on Tuesdayhighlighted how artificial intelligence is reshaping both productivity and central banking operations. 

Speaking in separate addresses, Cook focused on AI's potential to enhance economic efficiency, while Waller explored practical applications of AI within the Fed's own systems.

Impact on Productivity

According to Cook, AI could drive gains in productivity across multiple sectors, but it also introduces challenges for labor markets and income distribution. The governor emphasized that policy must carefully balance innovation with societal equity.

“As such, our normal demand-side monetary policy may not be able to ameliorate an AI-caused unemployment spell without also increasing inflationary pressure.”

-Lisa D. Cook, Governor, U.S. Federal Reserve

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