Fed's Warsh says AI investment won't be inflationary, will boost jobs

Federal Reserve Chairman Kevin Warsh acknowledged Wednesday 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 labor 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."