NEW w/ @bencasselman: The Fed has a conundrum on its hands as it tries to tame elevated inflation. One of the primary drivers of growth — A.I. — appears nearly immune to the higher borrowing costs the central bank has begun to impose on the economy. That means the Fed might need to tighten the screws on the economy more than otherwise would be the case to sufficiently slow down activity to return inflation to the 2% target. The brunt of that adjustment will fall predominantly on industries more sensitive to higher rates, such as housing and the automotive sector, and in turn the people employed by the companies in those fields.

In a Linkedin post on Friday, Beth Hammack of @ClevelandFed says she is hearing from her business contacts in the region that inflation "isn’t coming from only one source—it’s broad based." "For the first time in my tenure, I’m hearing from businesses who say they think we need to take action to curb inflation, and from consumers who can’t make ends meet about a growing sense of despair."