The Pulse
Fed Governor Lisa Cook Says Elected Officials Should Set AI Policy
Federal Reserve Governor Lisa Cook said elected officials should decide whether government takes a specific role in shaping AI’s trajectory. In a September 28 speech, she also linked AI investment to inflation pressures and discussed potent
AI.info Team · Written with AI ·
Federal Reserve Governor Lisa D. Cook said elected officials—not the central bank—should decide whether government takes a specific role in shaping artificial intelligence’s trajectory. She made the distinction in a September 28 speech at the Oakland Tech Week opening keynote, where she also discussed AI’s effects on inflation, employment and business growth.
Cook draws a line around government’s role
“Beyond that, any specific role for the government in the path of AI's trajectory is for elected officials to decide,” Cook said. She paired that statement with a narrower description of the Fed’s part: as a banking supervisor, it encourages responsible AI use in the financial sector when that use aligns with safe and sound practices and applicable law.
“Beyond that, any specific role for the government in the path of AI's trajectory is for elected officials to decide.”
Lisa D. Cook, governor, Federal Reserve Board
Cook listed privacy, bias, effects on workers, fraud, cybersecurity and intellectual property rights among the concerns that warrant attention. She described AI as a technology with wide-ranging economic effects, while saying that its benefits will depend on choices by researchers, consumers, businesses and policymakers.
AI investment adds to inflation pressure
Cook said investment in AI has pushed up prices for related goods, including chips, computers and software. She distinguished those sector-specific increases from broader pressures, which she linked in part to data-center construction’s demand for widely used inputs such as labor and energy.
Companies, she said, have spent only a small share of $2 trillion in announced AI investment plans. Cook pointed to electricity and water costs, each up about 5 percent over the previous year, and core goods prices, rising at an annual pace above 3 percent so far in 2026, as signs that price pressure may be spreading. She cautioned that AI-related productivity gains could ease inflation later, but said she did not expect them to offset broader pressure later this year.
Workers face a transition Cook says the Fed cannot solve alone
Cook said there was limited evidence so far that AI had significantly changed the overall structure of the labor market, noting that unemployment and layoffs remained low. She also cited signs of reduced labor demand in some coding roles and in simultaneous translation, along with difficulties some recent college graduates face in finding their first jobs.
If AI adoption raises unemployment temporarily by leaving workers’ skills mismatched with available jobs, Cook said the Fed’s options would be limited: cutting interest rates could support employment but also risk adding to inflation. She added that fiscal policy could help manage AI’s effects on workers, while making clear that the subject falls outside her remit at the Fed.
Small firms could share in AI-driven gains
Cook argued that the benefits of AI need not accrue only to large technology companies. She cited the Federal Reserve’s Small Business Credit Survey, which found that nearly half of small employer firms use AI and that 71 percent of those firms report productivity gains from it.
Her speech also tied those developments to monetary policy. Cook said she voted with the rest of the Federal Open Market Committee to raise rates by a quarter percentage point at its September meeting, citing inflation that remained above the Fed’s 2 percent target. She said future rate adjustments would depend on how the economy responds to earlier policy moves and on inflation and labor-market data in the coming months.