Fed's Musalem Warns AI Boom Won't Fix Inflation Today as Price Pressures Stay Elevated
Updated
Updated · Bloomberg · May 29
Fed's Musalem Warns AI Boom Won't Fix Inflation Today as Price Pressures Stay Elevated
5 articles · Updated · Bloomberg · May 29
Alberto Musalem said Thursday policymakers cannot count on a future AI-driven productivity surge to bring down inflation now, calling that approach risky in prepared remarks for a conference in Reykjavík.
Higher productivity could eventually ease price pressures by boosting output, but Musalem said officials should not base current inflation policy on gains that remain prospective rather than realized.
The warning keeps the focus on present inflation conditions and signals the Fed should respond to existing data instead of assuming technology-led disinflation will arrive in time.
Is the Fed's inflation fight about to kill a historic, AI-driven productivity boom before it even starts?
AI's soaring energy use is raising costs. Is the real threat an infrastructure crisis, not just inflation?