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Federal Reserve governor Lisa Cook isn\u2019t 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\u2019re 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<\/a> off guard for quite some time.<\/p>\n \u201cEvery single word is contested,\u201d said Cook, arousing laughs from the audience. \u201cI don\u2019t think AI is going to replace us in that sense, in the short run.\u201d<\/p>\n As an example, Cook talked about a recent report where she had to choose between using the word \u201cmodest\u201d or \u201cmoderate,\u201d explaining that the choice led to a lot of \u201cheartburn\u201d 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.<\/p>\n Earlier today, the Bank of International Settlements said<\/a> central banks needed to prepare for a \u201cprofound\u201d 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<\/em> reported that banks and other financial institutions would be disproportionately<\/a> impacted, with as many as 80% of jobs being changed or removed altogether.<\/p>\n 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 \u201con a bumpy path\u201d 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.<\/p>\n Cook further stated that 12-month inflation numbers will \u201croughly\u201d move sideways for the rest of this year, and that monthly data will likely be similar to what she characterized as \u201cfavorable readings\u201d 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%.<\/p>\n Going into next year, Cook expects inflation to slow down \u201csharply,\u201d with prices for housing services likely declining with more people signing new leases.<\/p>\n On the jobs side of the Fed\u2019s dual mandate, Cook said the labor market has \u201clargely returned to a better alignment between supply and demand,\u201d 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\u2014tight but not overheated. \u201cWe had almost 30 consecutive months of the unemployment rate of 4% or lower, and in modern history, that\u2019s a record.\u201d<\/p>\n<\/div>\n\n\u2018On a bumpy path\u2019<\/h2>\n
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