Survey: Over 60% of Economists Disagree with Woosh's "AI Rate Cut Theory"

BlockBeats News, February 9th, according to the Financial Times, this week the University of Chicago's Clark Center for Global Markets surveyed 45 economists, nearly 60% of whom disagreed with Powell's "AI Rate Cut Theory," stating that the impact of AI technology on prices and borrowing costs over the next two years is likely to be minimal. They expect that the decline in PCE inflation and the neutral interest rate over the next two years will be less than 0.2 percentage points.

Around a third of the respondents suggested that the AI boom might even force the Federal Reserve to slightly raise the so-called "neutral rate," at which level borrowing costs would neither stimulate nor drag demand.

This survey indicates that Powell's attempt to garner support from other Federal Open Market Committee (FOMC) members on the prospect of rapid productivity growth driven by AI could be tricky, making it difficult for him to cut rates by the magnitude Trump desires before the November midterm elections.