Federal Reserve Governor Michelle Bowman estimated that the core Personal Consumption Expenditures (PCE) price index likely rose 3.3% in October, citing AI-related demand and energy prices as drivers of the increase. Despite the persistence of these inflationary pressures, Bowman forecast that the core PCE measure will move closer to the central bank’s 2% target next year as economic shocks unwind.
Bowman said that bringing inflation down remains a priority given current labor conditions, though she noted that longer-term inflation expectations remain well anchored. The governor previously warned that the economy faces risks from financial markets, including the possibility of a sharp decline in stock prices if the returns on artificial intelligence investments fail to meet expectations.
