AI Is 'Juicing Up' Inflation, Says Moody's Chief Economist Zandi

Key Facts

With global inflation still above central bank targets in many economies, a new factor is entering the debate. Mark Zandi, chief economist at Moody's Analytics, said that artificial intelligence is 'juicing up' inflation, according to a CNBC report. He argued that AI-related investments and productivity gains are pushing prices higher, complicating the path for policymakers.

Recent inflation figures show a mixed picture. Japan's annual inflation rate came in at 1.5% in May, slightly below the 1.6% forecast (previous 1.4%), while Canada's inflation rose to 3.2% in May from 2.8% a month earlier, above the 3% forecast, per market data. These data points, combined with Zandi's comments, suggest that structural factors like AI may be adding to price pressures even as some economies see moderation.

Markets will watch for further signals from major central banks. The Fed's Christopher Waller is scheduled to speak on June 22, and ECB President Christine Lagarde also has a speech on the same day, according to the economic calendar. Any commentary on AI's inflationary impact could move sentiment. Traders should monitor upcoming inflation data from major economies to assess whether the AI effect is becoming more pronounced.