Archive · 2 Oct 2026
Federal Reserve’s Lisa Cook Flags AI Inflation Risk for 2027
Federal Reserve Governor Lisa Cook called AI-driven inflation a major risk for 2027.
Cook said rapid AI development could create supply bottlenecks and inflationary pressure that may persist.
She expects AI to increase productivity over time but is uncertain when it will reduce inflation.
Cook said frequent supply shocks have lasted longer than expected and are increasingly important for policy.
Geopolitical events, including the Middle East conflict, could disrupt supply chains and change the appropriate policy response.
- Who
- Federal Reserve Governor Lisa Cook, speaking with New York Fed President John Williams.
- What
- Cook warned that AI-related inflationary pressure is a major risk for 2027 and discussed the policy effects of persistent supply shocks.
- When
- October 1; Cook referred to 2027 as the main risk horizon and to a rate increase approved the previous month.
- Where
- An event at the Federal Reserve Bank of New York.
- Why
- The rapid AI buildout could create supply bottlenecks and inflation, while geopolitical conflicts could further disrupt supply chains.
Near-Term Inflation Risks
Long-Term Productivity Benefits
Economic effect of AI
Near-Term Inflation Risks
The AI buildout could create supply bottlenecks and inflationary pressure that may not resolve quickly.
Long-Term Productivity Benefits
AI could eventually raise productivity and produce disinflationary effects.
Response to supply shocks
Near-Term Inflation Risks
Persistent supply disruptions may require the Federal Reserve to adjust its policy response based on the affected sectors.
Long-Term Productivity Benefits
The conventional view was to look through supply shocks because monetary policy cannot directly change oil prices or stop wars, although higher rates can weaken employment and output.
- Speaker
- Federal Reserve Governor Lisa Cook
- Main risk
- AI-related inflationary pressure in 2027
- Inflation goal
- The Federal Reserve’s target is 2%
- Latest inflation cited
- 3.4% in August under the Federal Reserve’s targeted measure
- Recent rate decision
- Cook joined a unanimous vote the previous month to raise the policy rate by 0.25 percentage points
- Long-term AI effect
- Cook expects AI to eventually increase productivity
- Additional supply risk
- Geopolitical events, including the Middle East conflict, could disrupt supply chains
