In recent Congressional testimony, Federal Reserve Chair Jerome Powell repeatedly said that whether artificial intelligence (AI) triggers inflation ultimately depends on the Fed’s judgment and policy response. His core points can be summarized as follows:

1. ​​Short-term price swings ≠ inflation​​: AI infrastructure investment (such as a surge in chip demand) has pushed up some commodity prices, but such one-off cost increases do not necessarily amount to persistent inflation; the supply side (such as capacity expansion) could gradually absorb the pressure.
2. ​​The Fed’s decisive role​​: Powell made clear that AI’s final impact on inflation must be assessed by the Fed based on data, and policy will “have something to say.” If price increases evolve into broad, sustained inflation pressure, the Fed will take action.
3. ​​Downside inflation potential in the long run​​: Powell believes AI can suppress inflation through long-term effects on productivity and wages, but only if the technology dividend effectively transmits to the supply side rather than merely boosting short-term demand.
4. ​​Trade-offs between jobs and policy​​: In the short term, AI may disrupt the labor market, but in the long run it could create new jobs. The Fed needs to strike a balance between maintaining technological competitiveness and controlling inflation, avoiding excessive regulation that could weigh on the economy.