Fed Chair Warsh Says AI Is New Variable and Inflation Has Not Meaningfully Slowed

Fed Chair Kevin Warsh said at the Jackson Hole central banking conference on August 28 that artificial intelligence is a new variable that will affect the economy and policy implementation. According to PANews, he said the chance of much stronger economic growth is rising, forward guidance should have limited use, and market participants should focus on real information in the economy rather than outdated or inaccurate data. Warsh said the labor market is fairly stable and warned that inflation has not meaningfully slowed. He said policymakers must be convinced inflation is moving in the right direction, or the central bank still has work to do. Warsh reiterated that the Federal Reserve will bring inflation back to its 2% target, calling it a clear and fixed goal.