Fed Officials Say AI Productivity Boost Could Raise Neutral Rate

Some Federal Reserve officials have begun suggesting in recent days that productivity growth from artificial intelligence could mean higher interest rates, a view that would put them at odds with the Trump administration and its nominee to lead the US central bank.

“I expect that the AI boom is unlikely to be a reason for lowering policy rates,” Fed Governor Michael Barr said Tuesday in remarks prepared for a speech in New York.

Barr’s comments followed remarks from Fed Vice Chair Philip Jefferson, who argued in a Feb. 6 speech that “all other things being equal, persistent increases in ...