Fed’s Daly warns AI is fueling inflation, sees more rate hikes ahead
San Francisco Federal Reserve (Fed) President Mary Daly commented that there is no doubt AI has fueled price pressure and that it is “having limited impact on the labour market.”
Federal Reserve President Mary Daly warned that artificial intelligence (AI) is contributing to inflation and that further interest rate hikes may be necessary. Speaking at Stanford University, Daly said AI has limited impact on the labor market, but there is a risk it could exacerbate inflation. Daly noted that inflation is seeping into services, which has become more problematic as it becomes more sticky.
She expressed comfort with raising interest rates in September and emphasized that the Fed must focus on reducing inflation despite the potential disinflationary effects of productivity growth. Daly also highlighted that AI valuations have not unwound and that there is a positive momentum for productivity growth in the next 1-3 years.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
