John Williams, president of the Federal Reserve Bank of New York, said on the 9th (local time) that he is focusing on demand related to artificial intelligence (AI) as a key factor fueling U.S. inflation.
According to Bloomberg that day, Williams said at an event hosted by the New York Fed, "If AI continues to provide persistent demand-side impetus relative to supply on the inflation front, that will be something we cannot just look past."
Bloomberg reported that Williams said such sustained demand could lead to a benchmark interest rate hike.
He also said that if inflation lasts longer than the baseline outlook and rises to a meaningful level, "currency policy will need to respond."
However, Williams added, "Conversely, if conditions evolve more moderately, I think the current currency policy is still appropriately positioned."
He called Federal Reserve (Fed) Chair Kevin Warsh's recent launch of five task forces on ▲ Fed communications ▲ reduction of the $6.7 trillion portfolio (balance sheet) ▲ inflation models and measurement methods "a unique and timely" opportunity to review the Fed's core areas.