09-29-2026
The U.S. economy is navigating a mix of strong investment, steady consumer activity and a labor market with historically low unemployment. At the same time, inflation remains above the Federal Reserve's 2% target, creating a challenge for policymakers as they determine how to respond.
Jim Bullard, Dr. Samuel R. Allen Dean of the Mitch Daniels School of Business and former president and CEO of the Federal Reserve Bank of St. Louis, examines the forces shaping that outlook in a new video, recorded ahead of the Federal Reserve's September policy meeting. Since the recording, the Fed has voted to raise interest rates by a quarter point – its first increase since 2023 – citing persistently elevated inflation.
Bullard identifies the rapid growth of AI and the investment surrounding it as an important source of economic activity. The continued build-out of data centers, he notes, is contributing to growth, while stable consumer spending and low unemployment further support an otherwise positive outlook.
AI is also beginning to influence the labor market directly. While concerns persist about automation replacing workers, Bullard points to early evidence that businesses are primarily using AI to increase the productivity of existing employees – and in some cases, to support additional hiring rather than reducing it.
On energy markets, Bullard notes that Brent crude oil recently surpassed $100 a barrel, though the inflation-adjusted price remains roughly consistent with the 25-year average. "We've been enjoying below average, in real terms, oil prices for quite a while," he says, "and now we've come back up to the average." He does not expect oil prices alone to disrupt the U.S. economy.
For Bullard's perspective on the U.S. economy, the impact of AI and what could be next for growth, employment and inflation, watch the full video.
