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Colby Smith highlights that the Federal Reserve is confronting a major challenge in its ongoing efforts to control elevated inflation.
While the central bank has increased borrowing costs to slow economic growth, Smith points out that artificial intelligence is proving largely immune to these measures and continues to be a primary driver of growth in the U.S. economy.
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Smith previously reported that Dallas Fed’s Lorie Logan identified expectations for stronger growth as a factor in rising long-term yields, alongside the neutral rate and term premiums, in recent remarks. He also covered New York Fed President John Williams’ view that there was no immediate need for further policy action after September’s rate hike, with officials opting to await additional economic data, as reported in an earlier article. These comments provide further context for the Fed’s current approach.