PrintFed's Powell says generative AI to boost productivity, impact on inflation unclear
BY Reuters | ECONOMIC | 03/18/26 03:45 PM EDTPARIS, March 18 (Reuters) - Generative artificial intelligence tools will certainly contribute to productivity gains for years to come, Federal Reserve Chair Jerome Powell said on Wednesday but urged caution on whether AI's impact will be disinflationary.
Powell told a news conference after the Fed held rates steady that the current U.S. AI data center building boom currently was putting upward price pressure on many goods and services and was "probably pushing inflation up at the margin."
In the near term, "you're not looking at something that would immediately call for lower rates, or that would be lowering inflation over time," Powell said.
He added that it was an "empirical question" on whether AI will expand supply faster than demand, but it will contribute to higher productivity over time.
"Higher productivity is the thing that allows incomes to rise over time, and so it's a great thing," Powell said. (Reporting by David Lawder, Editing by Franklin Paul)
