Artificial intelligence has become one of the key drivers of the global economy, and heavy investment in the sector in the US is helping push up long-term bond yields. That was the assessment of European Central Bank chief economist Philip Lane in an interview with ANSA.
Lane said AI is supporting global trade this year, including in semiconductors and related materials. He added that Europe is also involved to some extent in the AI supply chain, but the investment boom in the US is one of the factors lifting long-term yields.
In his view, high long-term interest rates, especially when driven by global factors, are themselves slowing the euro area economy and easing inflation pressures. He said the ECB will take that effect into account when making decisions on its key rate, alongside inflation and broader economic risks.
At the same time, high energy prices have not yet produced significant second-round inflation effects, Lane said, though the pass-through to other parts of the economy remains uncertain. He noted that the energy shock was the main reason behind the ECB’s latest rate increases, while fresh inflationary pressure could limit room for policy easing.
Referring to Italy, where inflation recently stood at 4.1%, Lane called for targeted support for low-income households and warned against broad fiscal stimulus. He also said excessively rapid wage growth could hurt foreign investment inflows and job creation, while inflation stuck at 3–4% would seriously damage households and could push long-term rates even higher.
