The Fed’s wait-and-see approach to AI can’t last

FINANCIAL markets are obsessed with artificial intelligence (AI), and the broader public is aware of its looming impact on jobs and wages.

Yet, for the Federal Reserve, the concern has barely registered. This isn’t because its policymakers think AI doesn’t matter. It’s because they have no idea how its potentially vast repercussions will play out – and no good tools for shaping the outcome.

Last week, as Amazon cut thousands of corporate positions and Nvidia’s market capitalisation climbed to US$5 trillion, Fed chair Jerome Powell was asked about the subject during the press conference that followed the Fed’s latest policy announcement.