Fed's Paulson (2026 voter) says her R-Star estimate is close to Fed median of 3.1%; inflation levels are still too high, inflation expectations 'fragile'
- Unclear how much AI is driving higher productivity so far.
- Above-target inflation would complicate Fed's response to growth driven by artificial Intelligence
- No evidence labor market is driving inflation now
- Iran war creates risks for growth and inflation.
- Fed has made notable progress bringing inflation down.
Context
Fed's Paulson's assessment suggests that while inflation levels remain high and expectations are fragile, the central bank's view on potential growth driven by AI and geopolitical risks will shape future policy. Her alignment with the Fed's median R-Star estimate implies a cautious stance, indicating policy decisions may focus on balancing growth against persistent inflation risks.
Trade the TapeGet this analysis live, the moment it breaksNewsquawk's real-time dashboard delivers market-moving headlines and instant context to your desk before the rest of the market reacts.
Open Dashboard#UNITED STATES#USD#JAPAN#UNITED KINGDOM#IMPORTANT#FOREX#FIXED INCOME#EU SESSION#US SESSION#FEDERAL RESERVE#CENTRAL BANK#DXY