Bloomberg Surveillance · Thursday, October 1, 2026
Minneapolis Fed President Neil Kashkari stated that while the broad economy is strong, the long-term impact of the AI investment boom on the neutral interest rate is uncertain. He emphasized that the Federal Reserve will do what is necessary to bring inflation back to its target, even if the exact level to which rates must rise remains unknown.
“It will be effective. I mean, we will do what we need to do to get inflation back down to our target. Now, the question is ultimately how high. Of course, what you're asking is how high do rates have to go? I don't know the answer to that.”
“If AI proves to be as productive as people hope it will be, then this investment cycle could go on for a long time. If it ends up being not as productive as the investors are hoping, then maybe it won't go on for as long. So I just don't know the answer to that right now.”