Central bankers, as a rule, try to maintain stable prices, a strong job market and a sound financial system. The AI boom is a complexifier on all three fronts. The big picture: AI is blurring the usual indicators that central bankers rely upon to set policy, a new paper from a leading international body finds, simultaneously affecting the supply and demand sides of the economy and driving both structural and cyclical change. - The upshot, per the Bank for International Settlements — the Basel, Switzerland-based central bank for central banks — is that the rules of thumb on which policymakers have long relied are all being shuffled at once. State of play: In the U.S. and other hotbeds of AI innovation, an investment boom in the near…
Don't count on AI to solve America's inflation problem: That's the message from several Federal Reserve officials who warn that the promise of an AI-fueled productivity boom might not justify cheaper money. Why it matters: How AI shapes inflation and productivity will be a defining question for the Fed under the leadership of Kevin Warsh, who has staked out a case that the technology's supply-side benefits justify keeping rates low . - Some Fed officials say they see clearer evidence of AI-related investment boosting demand for labor, equipment and infrastructure than they do of widespread productivity gains. - The upshot: Inflation risks look more immediate than any AI-related productivity benefits, especially as inflation remains…
Newly confirmed Federal Reserve Chair Kevin Warsh is promising a major course correction at the central bank after years of inflation that crushed working families and exposed the failures of Washington’s cheap-money era. At his Senate confirmation hearing, Warsh called for “a regime change” in Fed policy after former Chair Jerome Powell’s tenure saw inflation […] The post New Fed Chair Promises Major Course Correction appeared first on StoneZone .
Newly confirmed Federal Reserve Chair Kevin Warsh is promising a major course correction at the central bank after years of inflation that crushed working families and exposed the failures of Washington’s cheap-money era. At his Senate confirmation hearing, Warsh called for “a regime change” in Fed policy after former Chair Jerome Powell’s tenure saw inflation soar above 8 percent during the Biden years and remain stubbornly above the Fed’s 2 percent target. As of April, inflation is still running at 3.8 percent, meaning Americans continue to pay more while wages struggle to keep up. Warsh appears ready to challenge the policies that helped create this mess: endless money creation and the Fed’s massive bond-buying program…Open