Fed's Warsh says AI investment won't be inflationary, will boost jobs

Federal Reserve chairman Kevin Warsh told the Senate Banking Committee that AI-driven investment will not be inflationary due to a supply-side response, and that AI will boost jobs in the short and long term despite potential medium-term labor market disruption.

Fed's Warsh says AI investment won't be inflationary, will boost jobs WASHINGTON Federal Reserve chairman Kevin Warsh acknowledged Wednesday Jul 15 that AI-driven investment is driving up prices, but said that it won’t be inflationary. He also said he believes that in the short-term and the long-term AI will boost jobs, though in the medium term could be disruptive to the labour market. “I don’t view a one-time change in prices as necessarily being inflationary because I think there’s a supply response; in that way this is different from a foreign conflict and what it might do, which tends to reduce the supply side of the economy,” Warsh told the Senate Banking Committee. “Will it increase measured prices over the course of the next 12 months? I suspect it will be, but whether that’s inflationary or not, that’s up to the Federal Reserve and we’re going to have something to say about it.” REUTERS Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free. Share with us your feedback on BT's products and services