Warsh Convenes Fed Forum on AI's Economic Impact as Officials Split on Jobs and Prices

The three-hour event at the Federal Reserve Bank of San Francisco begins at 9am Pacific time and will be livestreamed. According to the published agenda, Warsh gives opening remarks, followed by panels titled "At the Frontier: How Fast is SI/AI Advancing and What Comes Next?", "What the Evidence Shows: How Will SI/AI Reshape the Labor Market?" and "From Pilot to Practice: What Happens When Businesses Adopt SI/AI?", and a closing fireside chat.

The forum matters because the Fed's reading of AI feeds directly into interest-rate policy. If heavy investment in data centres, chips and power is lifting inflation now while the efficiency gains remain years away, the central bank faces pressure to keep rates higher. If AI is already making workers more productive, it would justify a more relaxed stance.

A Tech-Heavy Task Force

The San Francisco Fed says the event will gather "input from a wide range of stakeholders on technology's implications for the economy and the labor market." It is the only scheduled public event among the five task forces Warsh created after arriving at the Fed in May, Reuters reported. The members of the productivity and jobs task force all come from the technology industry, according to the agency. They include Chad Jones, a Stanford University economics professor who works with Anthropic's internal think tank, and Asha Sharma, who runs Microsoft's Xbox business. Venture capitalist Marc Andreessen chairs the separate task force focused on AI.

Warsh has called AI a "hinge point in history" and has adopted the term "super intelligence", in line with President Donald Trump's preferred language. He owned stakes in AI companies but sold them to comply with Fed ethics rules, Reuters said. His view has moved from treating AI mainly as a force that would lower inflation to a more qualified position.

Other Fed officials are more cautious. Governor Lisa Cook said at a September forum in Oakland that she was concerned about "at least a temporary increase in the unemployment rate", and Governor Michael Barr warned on Thursday of "serious short-term disruptions" to the job market.

Richmond Fed President Tom Barkin described the scale of spending in stark terms. "You have this investment that is truly historic. You are talking railroad-plus-interstate-highways-historic," he said, according to Reuters. "If that historic investment does not pay off and people scale back, you worry what is going to happen." He added that he hoped the forum would air "the strongest possible evangelist's view, as well as the strongest possible other view."

Public Backlash

The meeting comes as public opinion on AI hardens. Last week's midterm elections fuelled opposition to rapid data centre construction, including a push to ban such facilities in Oakland, whose mayor, Barbara Lee, said: "We have to make sure that AI is used responsibly and ethically." Concerns range from land use and mental health to financial stress from complex AI funding vehicles and national security, after reports about a top technology executive's alleged ties to a Chinese spy.

Investors will also be watching for any signal from Warsh on how the Fed weighs AI against inflation that ran faster than expected in October. The Fed publishes minutes from its latest policy meeting on Wednesday.