Bank of America states that artificial intelligence is not a significant factor in the near-term monetary policy.

Investing.com — Bank of America (BofA) believes that although artificial intelligence investments are growing rapidly, their macroeconomic impact remains limited and gradual. It is unlikely to have a substantial effect on central bank decisions in the short term.

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Bank of America states that artificial intelligence currently only exerts mild inflationary pressure, mainly through higher utility costs associated with energy-intensive data centers and positive wealth effects driven by the stock market. However, these pressures are not yet enough to force the Federal Reserve or other central banks to change their policy stance.

The bank believes that while AI investments are contributing to economic growth—expected to add about 0.4 percentage points to U.S. GDP growth this year—their impact remains relatively small amid broader macroeconomic drivers such as the labor market, fiscal policy, and energy prices.

One key reason AI has not become a central consideration in monetary policy is its low adoption and diffusion rates. Its application across the economy remains limited, meaning productivity gains that could lead to deflationary effects have not yet been realized on a large scale. Therefore, central banks are unlikely to respond to AI until its influence becomes more evident in wages, output, and pricing dynamics.

Bank of America also notes that the current AI boom is mainly driven by capital expenditure cycles, especially large tech companies building data centers and infrastructure. While this supports economic growth, it does not immediately translate into sustained demand-driven inflation that would warrant policy tightening.

However, in the long term, AI could complicate monetary policy. The bank expects AI to boost productivity and potentially raise the neutral interest rate, creating trade-offs for policymakers between stronger growth and evolving inflation dynamics.

Currently, Bank of America’s conclusion is clear: AI is economically significant but has not yet become a decisive factor in recent interest rate decisions. Central banks remain focused on more direct inflation and growth drivers.

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