NY Fed’s Williams: AI Could Lift US Productivity Like 1996-2005 Boom

Williams is framing AI as a productivity story rather than a demand story, which matters because the 1996-2005 comparison implies the gains show up in output per worker and in new business formation, not just in asset prices. That distinction shapes how the Fed reads inflation and the neutral rate, and it puts the burden of proof on whether the boom proves durable or fades as the earlier one eventually did. The open question is how much of this shows up in hard productivity data before it becomes a premise for policy.