Goldman Sachs COO John Waldron called out inflation as “the single biggest risk element” to the economy on Thursday during a talk at the Bernstein Strategic Decisions Conference in New York.

“Inflation, I would say it’s probably the single biggest risk element. It’s the one that worries me the most personally,” said Waldron, who is the No. 2 executive at Goldman Sachs after CEO David Solomon.

If longer-end interest rates move higher across the globe, “that can have an impact on cost of capital across the economy, consumer behavior,” Waldron said.

Earlier Thursday, the Bureau of Economic Analysis released the April data for a key inflation gauge for the Federal Reserve. Known as the Personal Consumption Expenditures (PCE) index, the April data showed its highest reading in three years.

Read more: How to protect your savings against inflation

Earlier this month, the bond market began signaling (again) that interest rates may not be high enough. The majority of traders are now pricing in a slightly higher chance that the Federal Reserve will raise interest rates this year (50.5%) rather than keeping them at the current level (49%), according to CME FedWatch.

A big part of the current inflation worry comes down to the uncertainty around how higher interest rates will impact a big driver of the US economy: the massive AI-driven infrastructure build-out.

“Rates can continue to move higher because rate hikes are not slowing the economy and inflation,” Apollo chief economist Torsten Sløk said in a Wednesday note, pointing out that AI-driven spending, which is having an impact across all of finance, is far less interest rate sensitive than consumer loans such as auto loans and mortgages.  (Disclosure: Yahoo is a portfolio company of funds managed by affiliates of Apollo Global Management.)

“I think we’re all worried about it, but there’s no reason to, at this moment, see any real signs of concern,” Waldron said, adding that AI and other activities are driving record financing.

“We’re all sitting here on pins and needles trying to figure out what’s going to happen [going] forward, but right now I don’t see any reason to believe the consumer isn’t continuing to spend, and the labor market is actually quite resilient,” Waldron added.

David Hollerith is a senior reporter at Yahoo Finance covering the cryptocurrency and stock markets. Follow him on X at @DsHollers.

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