Key facts
- San Francisco Fed President Mary Daly stated AI is not currently driving inflation.
- Daly believes AI could be a deflationary force in 5-10 years.
- She stated AI is not a pressing issue for current monetary policy.
- Current inflation drivers are higher tariffs, energy, and food prices.
San Francisco Federal Reserve President Mary Daly stated on Thursday that artificial intelligence is not currently a factor driving inflation up or down. While she believes AI could act as a deflationary force over a five- to 10-year window, she emphasized that this is not a pressing issue for monetary policy, which operates on a 12-month horizon. Daly also indicated that she does not think AI is behind the current rise in inflation. Instead, she attributed the current inflationary pressures to higher tariffs and, more recently, to increased energy and food prices since the start of the Iran war.