Fed Chair Kevin Warsh Warns of Artificial Intelligence: It Will Shake Demand

Federal Reserve Chair Kevin Warsh stated that the rise of artificial intelligence will create a short-term demand shock on the economy and will follow a bumpy transition period until supply catches up in the medium term.

Speaking at the annual meetings of the International Monetary Fund (IMF) held in Bangkok, Federal Reserve Chair Kevin Warsh addressed the impacts of artificial intelligence on the economy. Stating that the new technology is one of the most significant shifts in his lifetime for the U.S. and global economy, Warsh emphasized that the technology will transform the real economy, but the path to that point will be quite bumpy.

Stating that artificial intelligence will directly affect the demand side before impacting the supply side, Warsh noted that he expects a supply shock in the medium term and that this will provide major benefits to the U.S. and the global economy.