Federal Reserve Governor Michael Barr said further interest-rate hikes may be required as inflation risks have increased and the path back to the central bank’s 2% target remains unclear. He said the Federal Reserve has been forced away from its inflation goal, while risks to employment have declined. Barr expects gross domestic product growth in the second half of the year to improve slightly from the roughly 2% pace recorded in the first half. He also said artificial-intelligence investment is affecting prices and could support economic activity over about the next year, although productivity gains may take time and the technology could cause short-term labor-market disruption. It remains too early to determine whether AI will raise the neutral interest rate.