Kevin Warsh and the Specter of Inflation

Chicago Fed President Austan Goolsbee warned that the expected AI productivity boom poses a two-sided risk: if AI disappoints it could trigger stagflation, while if it delivers it would likely push interest rates higher. His comments raise uncertainty for risk assets and could lift rate expectations, putting pressure on equity valuations—especially AI-exposed tech names—and potentially routing flows into safe havens such as gold (XAUUSD). Markets also face near-term tests from Iran talks, upcoming Fed decisions, jobs and inflation data, leaving the recent tech-led rally vulnerable to shifts in growth and policy expectations. Overall, the note signals a mixed outlook that could drive greater volatility across stocks, rates and commodities.