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AI driven inflation has peaked: Goldman Sachs
Yahoo Finance • • business
Key Points:
- Goldman Sachs economists forecast that AI-related inflation pressures on core personal consumption expenditures (PCE) are moderate, currently adding about 45 basis points, with half attributed to genuine impact and half to mismeasurement.
- They predict AI-driven inflation impact will peak at 50 basis points by the end of 2024 and decline to 10 basis points by the end of 2027, mainly due to slower growth in memory and computer prices.
- The Federal Reserve raised interest rates in September 2024 to combat sticky inflation partly driven by AI demand and energy costs, marking its first hike since July 2023.
- New York Fed President John Williams indicated that one more rate hike might be appropriate this year, but further increases are uncertain and will depend on evolving economic conditions.
