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