US Fed sees lower inflation, hints at rate pause, AI investment fuels growth

U.S. consumer price (CPI) and producer price (PPI) indexes were released below expectations, prompting a modest decline in the dollar against major currencies. The softer data eased inflation concerns and increased market expectations that the Federal Reserve will keep its policy rate unchanged at the upcoming meeting, with the probability of a 0.25 % hike falling from 66 % to about 52 %.

Federal Reserve officials highlighted the trend. Former Treasury adviser Kevin Hassett said, “This is one of the best inflation reports I’ve ever seen in my career, and the Fed now has no excuse to raise rates.” New York Fed President John Williams added, “There are several pleasing signs that inflation has peaked.”

Fed Chair Kevin Warsh (Kevin Warsh) reiterated that inflation will become a thing of the past and emphasized that rapid investment in artificial‑intelligence technologies is bolstering the U.S. economy. He noted that AI‑driven data‑center demand is a key growth driver and could help ease price pressures over time.