Fed governor Lisa Cook maps out how she sees AI contributing to demand-side pressures now with the potential for a future, limited easing in those pressures as productivity benefits accrue:

On the near-term outlook: “In coming months I expect to see continued pressure on inflation from the AI buildout, as discussed today, and from the pass-through of higher oil prices and supply chain disruptions associated with the conflict in the Middle East. The labor market appears to be well positioned to handle an increase in rates.”

On the role of AI investment generating economy-wide demand pressures: “Attempting to fight sector-specific inflation with monetary policy could be a mistake. Our tools are too blunt to target narrow sectors, and addressing relative price shifts is not our role. Nonetheless, I see some economy-wide pressure from AI-fueled demand.”