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'
Importance
Level 1
- 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.
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