Lisa Cook Warns AI Investment Drives Broad Inflation

Federal Reserve Board of Governors member Lisa Cook stated on Monday that rising demand for artificial intelligence is creating broadening inflationary pressures across the economy. Speaking at the Oakland Tech Week conference, Cook explained that while price surges in chips and software might resolve without intervention, AI investment in data centers is driving up costs for energy, water, and construction labor.

Cook acknowledged that inflation has remained too high for too long, though she cautioned that using monetary policy to fight sector-specific inflation could be a mistake. Her comments follow a recent decision by the Federal Open Market Committee to raise interest rates by a quarter point. This move occurred despite calls for rate cuts from President Donald Trump.

Cook did not commit to future policy moves, noting that further adjustments will depend on how the economy reacts to the recent hike. The governor's public appearance follows a legal conflict over the summer in which the Supreme Court of the United States blocked President Trump from firing her.