Study finds AI like ChatGPT fails at inflation forecasting, outperformed by simple traditional models.

A recent study shows that artificial intelligence tools such as ChatGPT are significantly less accurate at predicting inflation compared to a traditional, low-tech model used by the Cleveland Fed. Joachim Klement, a strategist at Panmure Liberum, described ChatGPT as "absolutely useless" for macroeconomic forecasts. This finding challenges the common perception that AI can reliably predict complex economic indicators and suggests investors should remain cautious about relying on AI for such forecasts.