Federal Reserve Governor Lisa Cook expects AI and higher oil prices to keep pushing inflation up in coming months. She left the door open to further rate hikes, saying any move would depend on economic data, and is watching whether AI-related price pressures spread beyond chips.
Cook said AI-related increases in chip prices are currently sector-specific, so the Fed should not target those industries individually with its broad interest-rate tool. She cited water and electricity costs rising 5% over the past year and an AI-driven stock-market boom supporting consumer spending as signs inflation could broaden.
Cook said an AI-related productivity increase could put downward pressure on inflation, but she does not expect that before the end of the year. She sees some inflationary pressures broadening by then.
