Federal Reserve Governor Lisa Cook identified AI-related inflation as a top risk for 2027, saying the technology buildout could create price pressures that persist longer than expected. Speaking with New York Fed President John Williams at an event at the regional Federal Reserve bank, Cook said AI should eventually raise productivity but questioned when those gains would produce disinflation. She also said increasingly frequent supply shocks, including those linked to geopolitical tensions and the conflict in the Middle East, may require a different policy response depending on the sectors affected. Cook joined the Federal Reserve's unanimous decision last month to raise its policy rate by 25 basis points to support a timelier return of inflation to the 2% target. The Fed's targeted inflation measure was 3.4% in August and has remained above target for more than 5 1/2 years. Earlier reporting on Cook's views said the Federal Reserve was examining AI for internal applications, while AI-related demand was increasing pressure on energy, infrastructure and other resources.