WILLIAMS said it remains unclear how productivity gains will ultimately affect interest rates and Fed policy. "My answer to how changes in trend productivity growth will affect the economy and monetary policy is, unsurprisingly, it depends," he said, adding the impact depends on the nature of the change and its expected persistence. His remarks come as Fed officials assess whether recent productivity gains and AI-driven expectations of further improvements will alter inflation dynamics and the l

WILLIAMS said it remains unclear how productivity gains will ultimately affect interest rates and Fed policy. "My answer to how changes in trend productivity growth will affect the economy and monetary policy is, unsurprisingly, it depends," he said, adding the impact depends on the nature of the change and its expected persistence. His remarks come as Fed officials assess whether recent productivity gains and AI-driven expectations of further improvements will alter inflation dynamics and the labor market; several officials have expressed uncertainty about the eventual effects.