Fed Governor Lisa Cook Says Inflation Pressures Will Persist for Months

US Federal Reserve Governor Lisa Cook said that inflationary pressures are expected to continue for the next few months due to artificial intelligence (AI) related demand and rising oil prices, Reuters and other outlets reported on the 28th (local time).

Speaking at a conference on AI and emerging technologies in Oakland, California, Governor Cook said, "The labor market appears to be in a good position to withstand interest rate hikes. Moving forward, I will examine what policy rates are needed to bring inflation down to our 2% target."

She added, "Of course, the timing and scale of future rate adjustments will be determined based on how the economy has responded to policy measures so far, as well as inflation and labor market data in the coming months."

Cook noted that inflation has remained "too high for too long," pointing out that inflation over the 12 months through August was about 3.8%, roughly double the 2% target.

"In the coming months, inflationary pressures will continue due to the spread of AI, rising oil prices stemming from the Middle East conflict, and supply chain disruptions," Cook said.

She noted that while productivity gains driven by AI could bring some disinflation in the medium term, these effects will not materialize quickly enough this year to offset inflationary pressures.

Financial markets are pricing in about a 75% probability that the Fed will implement an additional benchmark interest rate hike in October, and are also projecting a high likelihood of a third consecutive rate increase at the December meeting.

Previously, the Fed raised its benchmark interest rate by 0.25 percentage points to 3.75–4.00% on the 16th.

This marks the first benchmark interest rate hike in 3 years and 2 months.

(Photo: Getty Images)
※ Please note: This article was translated by AI and may contain errors.