world-economy

Fed's Williams Eyes AI-Driven Demand as Key Inflation Risk

New York Federal Reserve President John Williams identified demand driven by artificial intelligence as his primary inflation concern. The central bank may need to raise interest rates if the trend persists. The assessment comes as the Fed prepares to overhaul its preferred inflation gauge, a change that could provide some relief to rate-hike pressures this year. Recent freight data shows trucking rate increases stem largely from supply-side constraints rather than robust demand, suggesting the broader economic picture remains mixed. Consumer goods manufacturers report ongoing pricing pressures. Mexico's inflation declined to a five-year low in June, offering policymakers in other regions potential relief as they evaluate whether disinflationary trends can be sustained.