With new data showing US inflation remaining not only persistent but getting hotter, Nigel Green, CEO of financial advisory giant deVere Group, says advances in technology could provide a crucial buffer against rising prices, particularly as Trump’s economic policies take shape.
Latest figures out Wednesday show the US Consumer Price Index (CPI) increased by 3.0% in January, higher than anticipated by most economists. Excluding volatile components such as food and energy, core inflation remains elevated at 3.3% year-on-year.
“The latest data shows that US CPI has come in above expectations. This suggests that the Fed will be even less likely to cut rates this year. However, there could be a potential answer,” says Nigel Green.
“Traditional models suggest that tax reductions and tariffs could fuel inflation, yet the rapid evolution of technology may provide a counterbalance.
“The integration of AI, automation, and digital efficiencies across industries could mitigate price pressures and help stabilize the economy.”
He continues: “Industries utilizing automation can scale output without significantly increasing costs, which may counteract the effects of protectionist trade measures.
“Historically, higher tariffs have contributed to inflation, but emerging digital solutions are changing the landscape. Predictive analytics and AI-enhanced logistics now enable businesses to pre-empt and resolve supply disruptions, preventing the bottlenecks that have traditionally driven price spikes.”
While digital transformation offers potential relief, some sectors remain more vulnerable to inflationary forces. Service industries, such as healthcare, hospitality, and retail, are labor-intensive and less adaptable to automation in the short term. With the US unemployment rate at 4.0%, wage growth pressures could keep inflation elevated.
“The real test is whether businesses can deploy tech solutions swiftly enough to prevent inflation from accelerating,” warns the deVere chief executive and founder. “If companies hesitate, waiting for further clarity on economic policy, inflationary risks could intensify, prompting more aggressive intervention from policymakers.”
The administration aims to sustain strong economic growth while avoiding runaway inflation. The Federal Reserve remains cautious of potential overheating, mindful of past periods when aggressive monetary tightening was required to contain inflation.
Meanwhile, businesses must decide whether to commit to innovation-led expansion now or take a wait-and-see approach.
The deVere CEO stresses that the ability to deploy and integrate technology across industries could reshape inflation trends. AI and robotics have already played a major role in increasing efficiency, but further adoption across more sectors will be necessary to have a widespread impact.
“Supply-chain efficiencies and AI-driven automation in manufacturing are already proving their value,” he states. “However, the next step is ensuring these technological advantages spread to service-based industries that are currently feeling the wage and inflation squeeze.”
Nigel Green points to financial services, logistics, and administrative operations as prime areas where AI-powered automation could increase productivity, cut costs, and help keep consumer prices from rising further.
“As businesses explore these opportunities, investors will also look to tech firms and AI developers as key drivers of economic stability in the coming years,” he adds. Although automation and AI-driven solutions have the potential to counteract inflationary pressures, the question remains whether adoption will happen quickly enough to make a difference in the short term.
“The pace at which businesses invest in technology will determine whether we see an economic inflection point or a continued struggle against persistent inflation.
“Tech-driven productivity could be the most effective tool to temper inflationary pressures, which are getting worse according to the latest data, but perhaps only if companies move swiftly and decisively,” concludes the deVere CEO.
