Fed: Warsh selects the leaders of the five new task forces
The aim is to modernise the Fed in five key areas: communication with the markets, reducing its balance sheet from 7,000 billion dollars, data collection, productivity in the age of artificial intelligence, and new models for analysing inflation
Kevin Warsh, the new Chair of the Federal Reserve appointed by Donald Trump, has launched his plan to reform the US central bank by setting up five task forces led by leading figures from the worlds of economics, finance and academia, including Mervyn King, Raghuram Rajan, Marc Andreessen and Nobel laureate Thomas Sargent.
The aim is to modernise the Fed on five fronts: communication with the markets, reducing the balance sheet from 7,000 billion dollars, data collection, productivity in the age of artificial intelligence, and new models for analysing inflation. Warsh argues that AI could usher in a period of strong productivity growth, allowing for interest rate cuts without reigniting inflation. However, this view is contested by other Fed officials, who believe that the rush to invest in data centres and AI-related products risks fuelling inflation instead.
