Fed Governor Lisa Cook says AI may already be cutting demand for coders and translators, and the Fed would have few tools if it lifts unemployment

Federal Reserve Governor Lisa Cook says AI may already be reducing demand for some workers, even though job losses have not yet shown up in the national figures. "There is evidence in some sectors, including coding jobs in the software industry and in simultaneous translation, that AI might be decreasing labor demand," she said in a speech titled "An Update on AI and the Economy" at Oakland Tech Week on 28 September 2026. She added that many recent graduates are struggling to land a first job: "This is possibly partly related to AI's ability to take on entry-level tasks." She was careful about the wider picture: "At the moment, there is limited evidence that AI is yielding significant changes to the structure of the labor market. The data underscore this: Both the unemployment rate and layoffs remain low." But she expects AI "to fundamentally change business practices and transform the labor market," and said she is "highly attentive to a scenario where AI leads to at least a temporary increase in the unemployment rate." That is the case that worries a central banker most. If the jobless rise came from a mismatch between workers' skills and the jobs on offer rather than weak demand, "we at the Fed would have limited tools," she said: cutting interest rates to bring unemployment down "could risk fueling inflation." Her outlook by horizon: in the short term AI is adding to inflation; in the medium term "the labor market will be at risk of entering a painful transition"; in the long term she is optimistic that AI-driven productivity can raise living standards. Cook, who sits on the rate-setting Federal Open Market Committee and voted for September's 25-basis-point rate rise, spoke for herself, not the Board. Her evidence is sector studies and graduate hiring, not company announcements; the employer-attributed AI job cuts on record are in the AI layoffs tracker on this site.