The Fed is now factoring AI into interest rate decisions, marking a major policy shift

Top officials at the Federal Reserve are now taking into account how artificial intelligence might boost worker output as they map out future economic conditions, a shift that could reshape how the central bank approaches interest rates and employment targets. Fed Chair Jerome Powell touched on this issue during his press briefing in December. Looking back at previous technology waves, he noted that past innovations brought more jobs and better pay despite initial concerns. However, he said the outcome with AI remains unknown. Research suggests these new AI tools, especially those that generate content, could significantly change both how much workers produce and the makeup of the job market itself. Two economists studying this issue created different models to see what might happen. Ping Wang from Washington University in St. Louis and Tsz-Nga Wong from the Richmond Federal Reserve Bank mapped out several possibilities. Dramatic productivity scenarios take shape Their...

https://www.cryptopolitan.com/how-ai-could-rewrite-rules-on-interest-rates-and-jobs/