Musalem Says the Fed Can’t Rely on AI to Lower Inflation (2)

Federal Reserve Bank of St. Louis President Alberto Musalem said policymakers cannot depend on a potential productivity boom from artificial intelligence to ease elevated inflation.

“I believe it would be risky to rely on the prospect of higher productivity growth in the future to solve our inflation problem today,” Musalem said Thursday in remarks prepared for a conference in Reykjavík, Iceland.

The war with Iran has renewed price pressures and led more policymakers to warn that interest rates may need to go higher if inflation remains elevated. Many officials would have preferred to remove language from the Fed’s post-meeting statement ...