Fed’s Cook Says AI Boom May Call for Broader Policy Toolkit
Fed’s Cook Says AI Boom May Call for Broader Policy Toolkit
Publish Date: 2026-02-24 14:11:00
Source Domain: www.pymnts.com
Federal Reserve Governor Lisa Cook said in a Tuesday (Feb. 24) speech that rapid advances in artificial intelligence (AI) could pose new challenges for the central bank’s traditional tools as it fundamentally reshapes the U.S. economy. In remarks delivered at the National Association for Business Economics conference in Washington, D.C. as part of a panel on “AI and Productivity across the Economy,” Cook highlighted both the promise of AI-driven productivity and the limits of monetary policy in addressing labor market disruptions tied to the technology.
Cook described the current moment as a potential “creative destruction” resetting of economic activity, where AI enables faster innovation, but may also displace workers before new opportunities take hold. She stressed that while AI has the capacity to drive long-term growth and new industries, the transition could see unemployment rise in the short term, a shift that conventional interest-rate adjustments might not be well-suited to counteract.
“In a productivity boom like this, increased unemployment may not stem from slack in the economy, and typical demand-side policy could end up stoking inflation while trying to counter what is essentially structural change,” Cook said, adding that other policy tools, including workforce training and education, may be more effective in helping displaced workers.
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Workers themselves are concerned about the prospect of AI and automation potentially taking their jobs, according to PYMNTS Intelligence Wage to Wallet™ Index. Labor economy workers are less worried about possibly losing their jobs than office workers.
Cook’s remarks underscore growing debate within the Fed about how technological change intersects with the central bank’s dual mandate of maximum employment and…
