BIS says AI boom risks clouding central banks' inflation signals

LONDON, July 28 : The artificial intelligence boom could make it significantly harder for central banks to judge the state of the economy and set interest rates, as the technology simultaneously boosts both demand and supply, the Bank for International Settlements said on Tuesday. In a bulletin on the economic implications of AI, the central bank umbrella group said policymakers face an unusually difficult task as AI generates powerful investment, trade and financial-market effects long before any broad-based productivity gains are fully visible.The current surge in AI spending, increasingly financed by debt, is already driving up economic activity and trade and fuelling gains in equity markets — all of which can add to near-term inflationary pressures. At the same time, AI could eventuall