Cook Says Fed May Not Be Able to Counter AI-Driven Job Loss (1)

Federal Reserve Governor Lisa Cook warned the US central bank may not be able to counter rising unemployment driven by adoption of artificial intelligence.

“If AI continues to raise productivity, economic growth could remain strong, even as churn in the labor market leads to an increase in unemployment. In a productivity boom such as this, a rise in unemployment may not indicate increased slack,” Cook said Tuesday in Washington.

“As such, our normal demand-side monetary policy may not be able to ameliorate an AI-caused unemployment spell without also increasing inflationary pressure,” she said.

Cook’s comments are the latest in a ...