Fed’s Lisa Cook says AI could sharpen the central bank’s data work
The Fed governor sees long-term promise in artificial intelligence but warns its buildout is adding to inflation pressures right now
Federal Reserve Governor Lisa D. Cook thinks artificial intelligence could make the central bank better at its homework. She also thinks the race to build AI is making the Fed’s main job harder.
Speaking at Oakland Tech Week on September 28, 2026, Cook described AI as a technology with two faces. One could boost productivity and economic research over time. The other is currently pushing up costs.
What Cook actually said about AI at the Fed
Cook was careful to draw a line, though. The Federal Open Market Committee, the group that sets US interest rates, does not use AI to make monetary policy decisions.
Instead, the Fed is exploring AI for internal tasks. Cook pointed to examples like summarizing documents and supporting financial stability analysis.
Beyond the Fed’s own operations, Cook highlighted AI’s long-term potential to lift productivity across the economy. She expects those gains to produce modest disinflationary effects in the coming years.
The inflation problem AI is creating today
The less flattering side of Cook’s speech focused on the present. Building AI requires enormous amounts of energy, infrastructure, and related resources, much of it tied to data center development.
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That demand is showing up in prices. Electricity and water prices have reportedly increased by around 5% over the past year, a rise Cook linked to AI-related demand.
Cook also referenced approximately $2 trillion in announced capital expenditures by firms on AI technologies. Only a small portion of that has been spent so far.
Combined with supply chain pressures, these costs are amplifying inflation concerns. Total inflation is estimated at approximately 3.8% for the twelve months leading up to August 2026. Core inflation, which strips out volatile food and energy prices, is estimated at about 3.4%.
Both figures sit well above the Fed’s 2% target.
Why Cook backed a rate hike
Against that backdrop, Cook said she supported the FOMC’s recent 25 basis-point interest rate hike.
Her reasoning tracks with the timeline she laid out. AI’s productivity benefits may eventually help cool prices, but she cautioned that those effects will not be enough to offset expected inflationary trends for the rest of 2026.