Fed's Logan: Investment demand for AI is big, real and near-term inflationary
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Very optimistic on long-term productivity improvements from AI Even with conservative estimates, electricity prices from data centers likely to be a source of modest inflationary pressure Increase in oil exports has come from inventories, not production Even if oil prices stay hi
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The desk interprets the recent comments from Fed's Collins as a signal of improving productivity and a less aggressive inflation outlook, which may support a soft-landing scenario for the economy. Per the full note [source], Collins emphasized that productivity gains are not solely AI-driven, indicating a broader improvement in supply-side conditions. This perspective aligns with our view that inflationary pressures may ease, allowing for sustained economic growth without the need for drastic policy measures. Current consensus targets from major firms suggest a range that reflects this cautious optimism, with upcoming economic indicators likely to influence market sentiment.
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