Federal Reserve officials are increasingly pointing to the artificial intelligence buildout, rather than tariffs, to explain why the prices of goods keep rising, according to minutes of their September meeting released Wednesday.
Fed officials cited “surging AI-related investments” as contributing to inflation pressures, alongside higher prices for crude oil and fuel due to the Iran conflict.
Several officials noted that prices for goods, excluding food and energy, continued to rise quickly “as effects of the AI buildout appeared to increase while the effects of tariff increases waned,” the minutes said.
A year ago, AI rarely came up in Fed discussions, where officials discuss how to steer the U.S. economy, according to a Washington Post analysis of meeting minutes. But this year, the technology is a hot topic.
Fed officials expect overall inflation to remain above their 2 percent target until 2029.
The AI buildout includes data centers, computers and chips, which companies are borrowing heavily to amass. Some officials said that the buildout could push demand across the economy past what businesses can supply, lifting prices further, according to the minutes.
Officials generally expect AI investment to produce stronger productivity and output in coming years, though they said the size and timing of those gains remain uncertain.
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