How AI's Rising Costs Are Driving Inflation and What Central Banks Should Do

When AI inference becomes cheaper or more expensive, firms pass those costs directly to consumers via inflation—just like energy shocks. Using U.S. data from 2022–2026, researchers measured this pass-through at nearly 1:1, then calculated the optimal interest-rate response central banks should deploy when facing AI-driven price shocks rather than traditional wage or commodity pressures.