Cathie Wood Predicts Inflation May Come in Lower Than Expected Amid AI-Driven Deflation

AIMPACT update, May 9 (UTC+8): Cathie Wood shared her market perspective, noting a key signal: despite a significant rise in oil prices over the past three months, the yield curve continues to flatten. This contradicts the traditional economic cycle pattern, where energy shocks monetized by the Fed typically steepen the curve—because the Fed has not monetized this energy shock. The bond market may be prematurely pricing in the strong deflationary impact of AI. Cathie Wood stated that the cost of training AI models has dropped substantially, while inference costs have fallen even faster. Meanwhile, productivity growth is accelerating beneath official data, and unit labor costs remain low. Although the dominant market narrative focuses on tariffs, deficits, and structural high inflation, deflationary forces driven by innovation are building. She forecasts that inflation could unexpectedly decline over the next 6–9 months, which would have profoundly positive implications for interest rates and long-duration equity assets. She also cautioned that markets often underestimate the speed and scale at which technological innovation reshapes the macroeconomic environment. (Source: BlockBeats)