{"id":74672,"date":"2026-11-13T23:08:13","date_gmt":"2026-11-14T03:08:13","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/fed-vice-chair-jefferson-warns-of-ai-inflation-risks-us-aviation-resumes-after-ground-stop\/74672\/"},"modified":"2026-11-13T23:08:13","modified_gmt":"2026-11-14T03:08:13","slug":"fed-vice-chair-jefferson-warns-of-ai-inflation-risks-us-aviation-resumes-after-ground-stop","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/fed-vice-chair-jefferson-warns-of-ai-inflation-risks-us-aviation-resumes-after-ground-stop\/74672\/","title":{"rendered":"Fed Vice Chair Jefferson Warns of AI Inflation Risks; US Aviation Resumes After Ground Stop"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Fed Vice Chair Philip Jefferson<\/strong> warned that <strong>AI-related investment and data-center spending<\/strong> are contributing to near-term <strong>inflationary pressures<\/strong> even as long-term productivity gains are expected.<\/li>\n<li>A rare <strong>nationwide ground stop<\/strong> in the U.S. was lifted late Friday after a &quot;temporary telecommunications outage&quot; caused by <strong>aging hardware<\/strong> disrupted over <strong>10,000 flights<\/strong>.<\/li>\n<li><strong>No bilateral talks<\/strong> are currently planned between <strong>Donald Trump<\/strong> and <strong>Vladimir Putin<\/strong>, according to U.S. officials, despite an upcoming trilateral summit with China in Shenzhen.<\/li>\n<li>Jefferson indicated the <strong>neutral rate of interest<\/strong> could rise if AI significantly boosts productivity, suggesting that current policy rates might be less restrictive than previously thought.<\/li>\n<li><strong>Nav Canada<\/strong> and the <strong>Mexican Aviation Authority<\/strong> have resumed normal operations or are clearing backlogs after grounding U.S.-bound traffic during the FAA outage.<\/li>\n<\/ul>\n<h2>Fed\u2019s Jefferson Links AI Spending to Persistent Inflation<\/h2>\n<p>Federal Reserve Vice Chair <strong>Philip Jefferson<\/strong> stated on Saturday that while <strong>Artificial Intelligence (AI)<\/strong> is likely to lift productivity significantly in the long run, the current surge in spending on the technology is adding to <strong>inflationary pressures<\/strong>. Speaking at the University of California, San Diego, Jefferson noted that <strong>price pressures remain stubbornly elevated<\/strong>, with inflation still sitting above the Fed&#39;s <strong>2% target<\/strong>. He emphasized that the central bank must carefully evaluate economic indicators and risks before making any further adjustments to monetary policy.<\/p>\n<p>Jefferson highlighted a potential shift in the <strong>neutral rate of interest<\/strong>\u2014the rate at which policy is neither stimulative nor restrictive. If AI-driven productivity growth increases the economy&#39;s potential, the neutral rate could rise, meaning the Fed might need to maintain higher interest rates for longer to achieve its goals. He also warned of <strong>labor market disruptions<\/strong>, noting that the transformation brought by AI may require solutions beyond the scope of monetary policy to support displaced workers.<\/p>\n<h2>Aviation Chaos Ends as FAA Lifts Nationwide Ground Stop<\/h2>\n<p>U.S. airspace is returning to normal after the <strong>Federal Aviation Administration (FAA)<\/strong> lifted a nationwide ground stop that halted departures for over four hours on Friday. Transportation Secretary <strong>Sean Duffy<\/strong> attributed the crisis to &quot;incredibly old air traffic control systems&quot; and a communication failure that began at <strong>Chicago Midway International Airport<\/strong>. The outage forced the grounding of thousands of flights, leaving tens of thousands of passengers stranded and impacting major carriers including Delta Air Lines (<a href=\"\/stock\/DAL\">DAL<\/a>), United Airlines (<a href=\"\/stock\/UAL\">UAL<\/a>), and American Airlines (<a href=\"\/stock\/AAL\">AAL<\/a>).<\/p>\n<p>International authorities responded rapidly to the U.S. outage, with the <strong>Mexican Aviation Authority<\/strong> grounding all U.S.-bound flights and <strong>Nav Canada<\/strong> implementing traffic management measures at major hubs like Toronto Pearson and Vancouver. While <strong>Nav Canada<\/strong> confirmed its systems were fully operational and removed restrictions after 6 p.m. ET, airlines warned that the ripple effect of cancellations and delays could last for several days. The incident has intensified calls for a <strong>$30 billion<\/strong> modernization of the U.S. air traffic control system.<\/p>\n<h2>Diplomatic Outlook: Trilateral Summit but No Bilateral Trump-Putin Talks<\/h2>\n<p>U.S. officials confirmed on Saturday that there are <strong>no bilateral talks<\/strong> currently planned between <strong>Donald Trump<\/strong> and Russian President <strong>Vladimir Putin<\/strong>. While both leaders are scheduled to attend an unprecedented trilateral summit with Chinese President <strong>Xi Jinping<\/strong> in <strong>Shenzhen<\/strong> next week, Washington clarified that the focus will remain on nuclear arms reduction and the conflict in Iran.<\/p>\n<p>The White House indicated that discussions regarding the war in <strong>Ukraine<\/strong> are being handled on a separate diplomatic track. Senior officials downplayed expectations for the trilateral meeting, characterizing it as an &quot;entry point&quot; for high-level conversation rather than a forum for immediate agreements. The summit comes as the <strong>New START<\/strong> treaty expires, leaving the world&#39;s major nuclear powers without a formal arms control framework.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Fed Vice Chair Philip Jefferson warned that AI-related investment and data-center spending are contributing to near-term inflationary pressures 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