Fed: Warsh says price rises are real due to AI, but they are not inflationary

The Chair of the Federal Reserve, Kevin Warsh, has acknowledged that AI-driven investment is pushing up prices, but stated that it will not cause inflation. He also stated that he believes AI will boost employment in both the short and long term, although in the medium term it could have a destabilising impact on the labour market.

"I do not regard a one-off price change as necessarily inflationary, because I believe there is a supply-side reaction; in this sense, the situation differs from that of an international conflict and its potential effects, which tend to reduce supply in the economy,” Warsh told the Senate Banking Committee. “Will prices rise over the next 12 months? I suspect they will, but whether or not that will be inflationary is for the Federal Reserve to decide, and we will have a say in the matter.”

AAA-Pca

The latest Radiocor videos