BIS Warns: AI Boom Is Making Central Bank Interest Rate Decisions More Difficult

July 28th, according to Jinshi Data citing a report from the Bank for International Settlements (BIS), changes in AI-related investments, trade, and asset prices are reshaping the macroeconomic outlook, making central banks' assessments of growth and inflation more complex. The BIS points out that AI infrastructure investment and consumer spending may push up inflation in the short term, while productivity improvements may lead to disinflationary effects in the long term. The BIS warns that if policymakers overestimate the AI productivity dividend or underestimate demand-side inflationary pressures, interest rates may remain too low, increasing inflation risks.