A key focus of Cook’s remarks was the importance of the Financial Stability Report (FSR), a semiannual assessment published by the Fed.
“Since its inception, the FSR was designed to act as a platform that policymakers could build upon to develop their own views about the system’s overall resilience, rather than expressing a centralized view,” she said.
She also reflected on scenario analysis, which she described as the “analytical workhorse” of financial stability policymaking. Designed to model shocks that may have no historical precedent, the tool can help policymakers “break free of the well-known human tendency to believe that tomorrow will be like today,” she said.
During the Q&A segment, Cook addressed the Iran war’s impact on inflation risk and AI’s implications for labor and financial markets. Cook, who spent 25 years studying the economics of innovation, placed herself “right in the middle” of the labor-augmenting versus labor-replacing debate about AI. She described AI as a general-purpose technology that will likely be transformative for the labor market.
“Americans depend on a stable financial system to start and support families, buy homes and vehicles, start businesses, and pay for their education,” Cook said. “Ultimately, our efforts to maintain financial stability are a service to the American people.”