Jefferson discusses shocks, energy prices, and AI policy

Philip N. Jefferson delivered a speech on how the Federal Reserve responds to economic shocks, with emphasis on energy prices and AI.

• He said the FOMC kept the federal funds rate at 3-1/2 to 3-3/4 percent at its June meeting and that policy remains positioned to support the labor market while inflation declines toward 2 percent.
• He highlighted two current developments: the Middle East conflict as an energy supply shock, and AI as a shock affecting both supply and demand, with firms investing heavily in data centers, advanced computing equipment, and AI capabilities.
• The speech was delivered at Stanford Institute for Economic Policy Research, Stanford University, in Stanford, California, on 16 July 2026; it is commentary and policy analysis rather than a new program announcement.