Fed's Musalem (2028 voter) says the economy is very strong now, but predicated on continued growth; right now AI capex boom is resulting in demand pressure, with productivity and supply relief not yet apparent

Logic of "looking through" supply shocks weakens when one shock follows another; heightens risk of broader inflation taking root. About half of inflation now is from persistent demand pressure. Inflation expectations remain consistent with 2% inflation over the long run. Monetary policy remains somewhat accomodative even after the last rate hike.