Cathie Wood Says AI Productivity Boom Could Push Long-Term Interest Rates Lower
ARK Invest CEO Cathie Wood said artificial intelligence-driven productivity could push long-term interest rates lower, drawing parallels with the Industrial Revolution as companies pass efficiency gains on to consumers through lower prices.
AI Could Lower Long-Term Rates
In a video posted on X, Wood said AI is beginning to influence the broader economy, making productivity growth an increasingly important driver of inflation and interest rates.
“If productivity growth was so strong that companies were able to pass along some of the efficiency gains into lower prices… I wouldn’t be surprised to see long rates coming down,” Wood said.
Lessons From The Industrial Revolution
Wood compared the potential impact of AI with the Industrial Revolution, saying long-term interest rates trended lower over that period despite repeated boom-and-bust cycles and before the creation of the Federal Reserve.
She said the current AI wave could follow a similar path if productivity gains become widespread enough to offset inflationary pressures across the broader economy.
Productivity Debate Meets Fed Policy
Wood’s comments come as investors continue to assess whether AI will ultimately prove inflationary or disinflationary.
Last week, Morgan Stanley said AI-driven productivity could keep U.S. interest rates above post-2008 levels if the technology boosts economic growth without triggering widespread job losses.
The Federal Reserve has also said AI-related demand was contributing to inflationary pressures, while adding that any productivity gains from the technology are likely to take time to materialize.
Meanwhile, the International Monetary Fund has said AI could lift productivity and global economic growth over the longer term, though it has cautioned that the benefits are likely to be uneven across industries and labor markets.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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