The Federal Reserve raised interest rates for the first time since mid-2023 as inflation proves more persistent than expected. Tom Barkin, president of the Richmond Fed, pointed to persistent tariff costs, higher gasoline prices and a massive wave of AI investment pushing up prices for technology equipment. He stated the economy is in an enormous AI investment cycle, with the technology already being used for coding, call centers, compliance paperwork and engineering. Despite corporate optimism about productivity gains, the anticipated mass job displacement has not yet materialized. Barkin said the AI apocalypse has clearly not arrived yet, noting far less conviction about its imminence compared to six months ago.
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