Fed Governor Lisa Cook Says AI Is 'not Going To Replace Us' | Old North State Wealth News
Connect with us

Economy

Fed Governor Lisa Cook says AI is ‘not going to replace us’

Published

on

Federal Reserve governor Lisa Cook isn’t afraid of losing her job to robots anytime soon. Speaking during a luncheon at the Economic Club of New York on Tuesday, Cook said that when you’re a central bank governor every word counts in a way that not only caught her off guard at first but that likely will catch AI off guard for quite some time.

“Every single word is contested,” said Cook, arousing laughs from the audience. “I don’t think AI is going to replace us in that sense, in the short run.”

As an example, Cook talked about a recent report where she had to choose between using the word “modest” or “moderate,” explaining that the choice led to a lot of “heartburn” in her office. Though the comment roused laughter from the audience, she further explained the Federal Reserve is currently looking into how third-party vendors are using artificial intelligence.

Earlier today, the Bank of International Settlements said central banks needed to prepare for a “profound” impact on the economy and the financial system from AI. In January, the International Monetary Fund predicted that advanced economies with more high-skilled jobs stood to see the biggest impacts from artificial intelligence, with as many as 60% of jobs affected. And in February, the New York Times reported that banks and other financial institutions would be disproportionately impacted, with as many as 80% of jobs being changed or removed altogether.

‘On a bumpy path’

Cook, who joined the Board of Governors of the Federal Reserve System in May 2022 and was reappointed last September for a term ending in 2038, also addressed the economy more generally. Speaking from prepared remarks, she predicted that three- and six-month inflation figures would continue to move lower “on a bumpy path” resulting from consumer resistance to price increases. Last month, the seasonally adjusted Consumer Price Index for all urban consumers was unchanged vs. 3.3% unadjusted.

Cook further stated that 12-month inflation numbers will “roughly” move sideways for the rest of this year, and that monthly data will likely be similar to what she characterized as “favorable readings” during the second half of last year. After starting 2023 at 6.4%, inflation dropped to 3% in June before slowly rising to 4.1% by the end of the year. Inflation is currently 3.3%.

Going into next year, Cook expects inflation to slow down “sharply,” with prices for housing services likely declining with more people signing new leases.

On the jobs side of the Fed’s dual mandate, Cook said the labor market has “largely returned to a better alignment between supply and demand,” despite an increase from 3.9% unemployment in April to 4% in May. Overall, the job market is closer to where it was pre-pandemic—tight but not overheated. “We had almost 30 consecutive months of the unemployment rate of 4% or lower, and in modern history, that’s a record.”

Subscribe to the Fortune Next to Lead newsletter to get weekly strategies on how to make it to the corner office. Sign up for free.

Read the full article here

Trending

Copyright © 2024 ONSWM News. Content posted on the Old North State Wealth News page was developed and produced by a third party news aggregation service. Old North State Wealth Management is not affiliated with the news aggregation service. The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date the articles were published. The information presented is not an offer to buy or sell, or a solicitation of any offer to buy or sell, any of the securities discussed.