RBA official: AI investment boom will drive inflation first

Reserve Bank of Australia Deputy Governor Sarah Hunter says surging AI investment will drive inflation before productivity gains arrive. Data center construction is intensifying demand for skilled labor, rising building costs are feeding into CPI, and pricier new smartphones and consoles add a small push. She also warns that if AI returns disappoint investors, stocks and corporate bonds could be re-rated sharply because the risk premium demanded by investors is currently low.