BOJ deputy Uchida (4-5 Oct): AI is 'a big positive demand shock' that may move the neutral rate; AI bond issuance lifts long yields
3 items, from 5 Oct 2026 to 6 Oct 2026, oldest first.
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BOJ deputy Uchida (4-5 Oct): AI is 'a big positive demand shock' that may move the neutral rate; AI bond issuance lifts long yields
Bank of Japan Deputy Governor Shinichi Uchida said AI has pushed up activity and prices, eased financial conditions through equities while heavy bond issuance by AI firms has pushed up long-term rates, and could change r-star via productivity and capital accumulation; he warned of a correction if profits do not follow.
Why it matters. A senior central banker says spending on AI is itself pushing up prices and long-term interest rates and may raise the level at which rates settle, while warning of a fall if the profits do not arrive.
Next. The Bank of Japan's end-October decision and outlook report.
ECB's Lane (5 Oct): AI may be damping euro-area labour demand; AI boom adds ~1 point to annual credit growth
In a Frankfurt speech, ECB chief economist Philip Lane said 'the prospect of AI substituting for some types of employees may also be contributing to the moderation in labour demand', that the AI boom accounts for just under one percentage point of annual credit growth, and that the global AI boom is pushing up long-term rates by more than Europe's own AI surge warrants. He kept a 'middle path', with energy inflation at 18.8% against 2.3% for the rest.
Why it matters. The euro area's top central-bank economist now says publicly that AI may already be reducing hiring and that the worldwide AI investment wave is pushing up Europe's borrowing costs.
Next. Euro-area employment figures and the ECB's next meeting, where these effects would show in its forecasts.
SF Fed's Daly (6 Oct): AI demand shock may outlast the Fed's 1-3 year look-through; more hikes depend on it
San Francisco Fed president Mary Daly told Axios that AI demand could spread beyond high-end chips before supply catches up, making it 'less a one-off'; firms are seeking forward contracts for memory. Whether more tightening is needed hinges on AI, tariff and energy shocks persisting.
Why it matters. A senior US central banker says AI's demand for chips and power may keep inflation up for years, not months, which argues for higher interest rates for longer.
Next. The Federal Reserve's next rate decision on 28 October.