Federal Reserve chair Kevin Warsh said on 16 October that the Fed expects to use AI to analyse data more effectively when conducting monetary policy, RTHK reported. Warsh also expects investment in the technology to push prices higher in the short term, even as he anticipates longer-term economic benefits.
Warsh spoke at an IMF event in Bangkok moderated by IMF chief Kristalina Georgieva and described AI as a positive supply shock over the medium term, Bloomberg reported. He called the technology “probably the most consequential change to the US and the global economy in my lifetime”.
The prospect of higher prices from AI investment has also drawn attention elsewhere at the Fed. Governor Lisa Cook flagged the AI buildout as a major 2027 inflation risk.
Warsh said AI would make economies that use it well more productive. He cautioned that the path towards those gains would be “a very bumpy one”, citing uncertainty about how markets for the new technologies will develop.
