US: Will AI-driven productivity lead to disinflation?

Research evidence excerpt

US: Will AI-driven productivity lead to disinflation?

Global Markets Research

28 July 2026Economic Insights

Economics - North America

Research AnalystsUS: Will AI-driven productivity lead to

North America Economicsdisinflation?

Jeremy Schwartz - NSI

• We view Chair Warsh’s optimism on the disinflationary impact of productivity as an jeremy.schwartz@nomura.com

important signal of his dovish inclination. +1 212 667 9637

Ruchir Sharma - NSI • In theory, productivity can have either a positive or negative impact on inflation. ruchir.sharma@nomura.com

Historically, there is some negative correlation, but the relationship is inconsistent and +1 212 667 9186

has performed especially poorly in recent decades.

Aichi Amemiya - NSI

• The policy implications of productivity trends are subtle. In real time, strong aichi.amemiya@nomura.com

productivity growth is a good reason to tolerate hawkish signals from growth or wages. +1 212 667 9347

This is different from assuming future productivity growth will drive incremental

disinflation.

• Warsh has not convinced other Fed officials that AI will be predictably disinflationary.

His repeated emphasis on productivity and supply growth makes us skeptical that he

will turn hawkish and support pre-emptive rate hikes though.

Fig. 1: Data point to little evidence for "disinflationary productivity"

Correlation between trend productivity and headline CPI

Note: Labor productivity is real output per hour of all persons. Following Gordon (2005), we define trend productivity growth as the HP trend of the 8 qtr change (with smoothing

parameter as 6400, based on Gordon (2003))

Source: BLS, BEA, Haver, Nomura

As Fed Chair, Kevin Warsh consistently emphasizes productivity growth, suggesting this

should be an important driver of policy decisions.