San Francisco Fed’s Daly warns AI-led investment could add inflationary pressure by 2026, a dynamic that may influence the path of interest rates.
The Federal Reserve’s examination of artificial intelligence’s impact on inflation has sharpened with a warning from San Francisco Fed’s Daly that AI-driven investment could become inflationary by 2026. The new detail suggests policymakers are weighing whether a surge in spending tied to AI adoption could add to price pressures, a development that may prompt rate hikes if inflation materializes and reinforce a cautious approach to monetary policy.