AI has moved to the center of economic and geopolitical strategy, with corporations committing hundreds of billions of dollars to AI infrastructure, yet one fundamental question has received far less attention: how AI will reshape the conduct of monetary policy. AI represents a structural transformation that changes how inflation emerges, how expectations are formed, and how financial risks accumulate, challenging the stable framework central bankers have relied on for nearly half a century. The current debate has focused on how much AI will increase productivity, but for central banks, the more important issue is how AI changes the relationship between inflation, growth and financial stability. AI simultaneously affects production technologies, firms’ pricing decisions, household expectations, investment behavior and financial markets, blurring the distinction between cyclical fluctuations and structural transformation upon which modern monetary policy has been built. During the transition to an AI economy, these two forces may become almost impossible to disentangle in real time.