Goolsbee Warns AI Hype and $96 Oil Could Force Rate Hikes
Updated
Updated · Reuters · May 28
Goolsbee Warns AI Hype and $96 Oil Could Force Rate Hikes
2 articles · Updated · Reuters · May 28
Austan Goolsbee said expected AI-driven productivity gains could lift inflation before those gains arrive, leaving the Fed and other central banks needing to raise rates to prevent overheating.
His argument hinges on anticipation: if households and businesses spend ahead of future productivity gains, prices can rise now, unlike the 1990s computer boom that boosted growth without igniting inflation.
Oil and other supply shocks would worsen that dynamic, he said, citing higher crude prices from the Iran war alongside possible supply-chain disruptions.
Brent crude was around $96 in his earlier remarks, where he called the war's energy impact a persistent, stagflationary shock for Asia, underscoring his broader warning that inflation risks are spreading across borders.
With peace talks stalled and oil markets in chaos, what is the ultimate price for reopening the Strait of Hormuz?
The Hormuz crisis exposed global fragility. Which critical chokepoint could spark the next worldwide economic shock?
As the Iran war fuels a global green energy boom, which nations will emerge as the new economic powerhouses?