The president of the Federal Reserve Bank of New York said demand driven by AI could force the central bank to raise rates, according to Bloomberg News.
John Williams said that among the factors driving inflation that the Fed considers, he is most focused on AI demand.
“If this creates a sustained impulse to demand relative to supply in inflation, I do think that’s the kind of situation where you don’t look through this,” Williams said Thursday during an event organized by the New York Fed, the news outlet reported. As such, “monetary policy would need to respond to that.”
The Fed has kept rates steady in 2026, but support for rate hikes is on the rise.