Fed Takes Stock of AI’s Shockwaves Across Jobs, Wages, and Inflation

Federal Reserve Governor Lisa Cook used a September 28 speech to deliver one of the most detailed official assessments yet of how artificial intelligence is reshaping the U.S. economy. While the Fed traditionally focuses on broad indicators like productivity and inflation, Cook zeroed in on how generative AI and autonomous “agentic” systems may ripple through households via wage inequality, job transitions, and corporate pricing power.

She argued that, as with past IT revolutions, AI is likely to boost productivity over the long run. But in the transition phase, rapid automation of specific occupations could trigger pockets of unemployment and wage stagnation. Cook also warned that if large firms with the capital to deploy advanced AI pull further ahead of smaller rivals, the resulting concentration could strengthen their ability to set prices, subtly altering inflation dynamics and complicating monetary policy.

At the same time, Cook stressed that the Fed does not regulate AI directly; decisions on guardrails and safety standards rest with elected officials and regulators. The central bank’s role, she said, is to closely track how AI-driven shifts in investment and labor markets show up in data, and to adapt interest-rate and financial-stability policy accordingly. The speech underscores that AI is no longer a niche tech issue, but a structural force the Fed must now build into its baseline view of the economy.