Fed's Cook Warns AI Buildout and Persistent Supply Shocks Threaten Inflation Outlook

Federal Reserve Governor Lisa Cook warned that recurring supply shocks and artificial intelligence infrastructure demand pose significant inflation risks, potentially limiting future monetary easing. Speaking alongside New York Fed President John Williams, Cook named the AI buildout as her top macroeconomic risk for 2027, noting capital spending is creating near-term bottlenecks before delivering productivity gains. She argued that policymakers may need to reconsider looking through supply disruptions, citing a statistical link between gasoline prices and consumer confidence, which shapes spending that accounts for roughly 70% of U.S. GDP.