John Williams, the president and CEO of the Federal Reserve Bank of New York, has warned that surging demand tied to artificial intelligence could push US inflation higher, potentially forcing the Fed to raise interest rates.
Williams sits on the Federal Open Market Committee, making him one of the most influential voices in US monetary policy.
The AI boom cuts both ways
In a January 12 speech, he pointed to increased AI investments as a contributing factor to stronger real GDP growth. By March 3, he was projecting real GDP growth of around 2.5% for 2026, crediting robust AI spending as one of the key tailwinds powering the economy forward.
Williams has projected overall inflation at 2.5% for 2026, with a target of returning to the Fed’s 2% goal by 2027.
