Goldman Sachs vice chairman Robert Kaplan has said artificial intelligence adoption will be disinflationary, arguing that faster productivity growth from the technology could influence both inflation dynamics and central bank responses.
Kaplan made the comments during an appearance on CNBC's Closing Bell, where he also addressed geopolitical uncertainty and volatility in the global oil market as factors relevant to Federal Reserve policy considerations.
The argument rests on a straightforward mechanism: as AI allows workers to produce more output in less time, the cost of goods and services falls, easing price pressures across the economy without the need for tighter monetary policy.
The view places Kaplan alongside Fed chair nominee Kevin Warsh, who has described AI as structurally disinflationary Charles Schwab and drawn comparisons to the internet's economic impact in the 1990s, when productivity surged without triggering sustained inflation.
Not all policymakers are convinced, however.
Fed governor Michael Barr has said he expects the AI boom to be unlikely to be a reason for lowering policy rates, and has argued it is very hard to say that productivity gains would be disinflationary.
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Fed chair Jerome Powell has taken a similarly cautious position, acknowledging that AI-driven productivity gains could eventually lower inflation, but warning that the massive physical buildout of data centres is currently putting upward pressure on prices.
Kaplan's interview, which also covered the current state of markets and the oil market's intersection with the Fed's outlook, comes as the question of AI's effect on monetary policy becomes an increasingly live debate within the central bank.
The recap
- Kaplan said AI adoption will be disinflationary on CNBC.
- Kaplan is Vice Chairman at Goldman Sachs investment bank.
- He discussed markets, global oil and Federal Reserve impacts.
