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2026-05-28 22:34:14
[Federal Reserve's Mossallem: Can't Expect an AI Boom to Solve Inflation] Federal Reserve Chairman Mossallem stated that policymakers cannot expect a potential productivity boom from artificial intelligence to alleviate persistently high inflation. Mossallem noted, "I think it would be risky to expect future productivity growth to solve our current inflation problem." The conflict with Iran has reignited upward pressure on prices and prompted more policymakers to warn that further interest rate hikes may be necessary if inflation remains high. Mossallem warned that, after adjusting for inflation, the Fed's benchmark interest rate is currently below the so-called "neutral level"—a level that neither inhibits nor stimulates the economy. He also pointed out that the labor market remains stable, inflation is "significantly above" the Fed's 2% target, and long-term inflation expectations are "gradually rising."
