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National Bank of Canada's Senior Economist Jocelyn Paquet highlights that AI-driven investments are sustaining US GDP growth above potential levels, projecting 2.4% in 2026 and 2.0% in 2027. This growth trajectory complicates the Federal Reserve's rate-setting path, as prolonged expansion could delay rate cuts or necessitate tighter monetary policy. The analysis underscores the interplay between technological innovation and macroeconomic stability, with implications for global markets.
For traders, this development introduces uncertainty in Fed policy expectations, which directly impact USD demand and yield-sensitive assets. The USD's strength against major currencies could persist if the Fed maintains a hawkish stance. Additionally, AI-related sectors may see increased capital inflows, affecting equity and commodity markets. Investors should monitor upcoming Fed statements and economic data for clues on policy adjustments.
The prolonged AI-driven growth could reshape long-term economic models, influencing inflation dynamics and labor markets. For the MENA region, this may affect remittances, trade flows, and foreign direct investment. Key indicators to watch include US employment reports, manufacturing PMIs, and global AI adoption trends. Central banks in the Gulf may need to reassess their monetary strategies in response to shifting global growth patterns.
