Mary Daly, president of the San Francisco Federal Reserve, says artificial intelligence will influence monetary policy decisions in the near and medium term without becoming an immediate inflation driver. Macroeconomic studies so far show little evidence of instant productivity gains, but the integration of AI is expected to transform growth and productivity over time. Daly believes AI could become deflationary over a five- to ten-year horizon, while its inflation effect remains limited to the next twelve months. Heavy investment in AI infrastructure supports demand in the short term, but uncertainty about its future returns complicates the Fed’s forecasts.
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