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Macro

Fed’s Williams: US facing unusual demand and supply shocks, inflation too high

New York Fed President John Williams said the US is facing an unusual combination of demand and supply shocks, with inflation “absolutely too high.” He said AI development is pushing inflation higher, at least in the short term, and that energy prices are feeding through to inflation as expected. Inflation expectations remain well anchored, he added.

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AI take

Williams framing AI as a near-term inflation driver is notable because it recasts the technology narrative that has powered much of the crypto and RWA investment case: the same buildout attracting capital may also be keeping price pressures firm. The split between elevated inflation and anchored expectations is what gives the Fed room to stay patient, and that distinction matters for anyone holding rate-sensitive digital assets. Whether AI's price effects prove as transitory as the supply shocks he describes, and whether anchored expectations survive another round of energy pass-through, are the open questions.

Generated by AI for reference only.

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