Daly: AI carries weight for Fed policy over near and medium term

New remarks from the Fed's Daly are now circulating.

• How the Fed thinks about policy in the near and medium term is where AI really matters.
• The price stability and employment mandates are also areas where AI matters.

Daly is inserting AI into the monetary policy discussion, and the topic carries implications for inflation and employment alike. Her stress on the near and medium term signals that she views it as relevant to the policy choices the Fed is already weighing.

These comments on their own give no obvious hawkish or dovish lean. The missing element for traders is her assessment of how AI might tip the balance between inflation pressures and employment risks, and whether that would alter the right trajectory for interest rates.

Earlier today, Richmond Fed President Barkin described the economy as still resilient, saying consumer spending remains firm even as incomes are relatively flat, while inflation pressures continue to muddy the policy outlook. The combination of higher costs and years of elevated inflation has made it easier for businesses to pass price increases along to their customers. He also flagged AI investment as a source of supply-chain strain and additional demand that the Fed can offset through monetary policy. On rates, he called the direction clear but the pace uncertain, backing a gradual approach while officials review the latest figures. His overall tone points to ongoing inflation worries, softened by a willingness to let evidence set the speed of policy adjustment.