Charles Evans, former president of the Chicago Federal Reserve, says the surge in investment in artificial intelligence infrastructure could increase inflation risks in the United States. Higher demand for construction, equipment, energy and labor driven by artificial intelligence could lead the Federal Reserve to consider additional interest rate hikes. The US Consumer Price Index rose 3.7% year over year in September, exceeding the Fed’s 2% target. Markets assign a significant probability to at least one rate hike in 2026, while the effective federal funds rate currently stands at 3.88%. The Fed’s upcoming statements, economic data and continued strength in employment and wages will shape expectations for future monetary policy.
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