Former Fed Official Warns AI Could Fuel Inflation Despite Productivity Gains

Former Chicago Fed President Charles Evans stated that while AI can boost productivity, it may also exacerbate inflation due to chip supply constraints. He emphasized that monetary policy alone cannot solve AI-driven labor market issues.

Wed May 27 2026

Former President Evans Analyzes AI's Dual Economic Impact

Charles Evans, former President of the Federal Reserve Bank of Chicago, recently stated at an event in Hong Kong that while artificial intelligence (AI) can enhance productivity, it also has the potential to intensify inflationary pressures. He noted that the widespread adoption of AI technology, if constrained by semiconductor supply and production capacity, could drive up relative prices and create inflation burdens for central banks worldwide.

AI-Driven Labor Market Shifts and Policy Responses Required

Evans expressed concerns that AI could lead to unemployment and labor market mismatches. He explained that in such a scenario, accommodative monetary policy alone might not be effective in addressing structural inefficiencies and could instead worsen inflationary pressures. He emphasized that resolving AI-induced labor market transition issues would require fiscal, industrial, or broader coordinated policy measures beyond just monetary policy.

*Source: 매일경제, 富聯網 (2026-05-27)*

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