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2026-05-29 09:01:03
[Federal Reserve Hawkish Voices Rise, Challenging Warsh's AI-Driven Inflation Judgment] (1) Several Federal Reserve officials (such as Mussalaim and Cook) have stated that if inflation fails to ease in the short term, it may be necessary to raise interest rates. The Personal Consumption Expenditures (PCE) price index rose 3.8% year-on-year in April, mainly driven by energy prices. (2) Hawkish voices within the Federal Reserve are growing, foreshadowing a heated debate at Chairman Warsh's first policy meeting next month. Warsh once believed that artificial intelligence would help suppress inflation and thus supported interest rate cuts; however, with current high energy prices, the market has begun to bet on a possible interest rate hike. (3) Mussalaim, Cook, and Goolsby, among others, question whether AI can curb inflation, instead pointing out that AI-related investments (such as chips and data centers) may lead to new inflationary shocks. Goolsby further believes that optimistic expectations of AI improving productivity may stimulate consumers to spend in advance, leading to an overheated economy and forcing the central bank to raise interest rates.
