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As of the report, Warsh has been at the helm for 10 weeks, leading a 112-year-old institution with a $6.7 trillion balance sheet. While he is pushing for a paradigm shift through AI and structural changes, the Fed is currently still using its standard toolkit of adjusting the federal funds rate target range based on government economic statistics to combat inflation.

Warsh has raised the possibility of cutting the number of monetary policy meetings from eight per year to six. The logic is that this would allow each meeting to incorporate two months of inflation and employment data rather than just one, and provide officials more bandwidth for other responsibilities like bank regulation and payments systems.

The press conference led to a market blowup where markets sold off, partly because Warsh was vague regarding the possibility of raising interest rates to combat inflation. The sell-off was likely exacerbated by traders unwinding positions bet on a rate hike and outsized moves in the thinly traded market for long-term Treasury bonds.

Before taking office, Warsh built AI bots named "Milton" and "Tobin" that ingested the collected works of 20th-century economists Milton Friedman and James Tobin to provide insights on contemporary economic questions.

Warsh aims to use AI to understand the economy in real time to enable better decision-making a couple of years down the road. He wants to move beyond backward-looking survey data and forward-looking projections by using real-time information from banks, retailers, and other companies to provide a more reliable guide to inflation and growth.

Warsh is attempting a "high-wire act" where he seeks to fundamentally rethink the central bank's approach to guiding the economy while simultaneously using standard policy toolkits to reduce stubbornly persistent inflation.