The president of the Fed, Kevin Warsh, believes that artificial intelligence is the most significant change of his life for the economy, although he anticipates a bumpy road.
According to Infobae, the president of the Federal Reserve of the United States (Fed), Kevin Warsh, asserts that artificial intelligence will represent the most significant change of his life for the US and global economy. He warns, however, that its development will be rocky.
Warsh made these statements in Bangkok, during the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, in an informal chat with the IMF's managing director, Kristalina Georgieva.
“I would say that the arrival of this new technology is probably the most significant change for the United States and the global economy in my lifetime.”
The Fed head pointed out that the expansion of investment in AI could raise prices in the short term due to increased demand, although he anticipates favourable long-term effects thanks to greater productive capacity. He added that countries that adopt this technology appropriately will be more productive.
The Federal Reserve plans to incorporate artificial intelligence tools to analyse data when defining its monetary policy. Warsh believes that the technology will also help central banks around the world to better analyse data.
Warsh acknowledged uncertainties regarding market evolution. According to him, the path will be very bumpy because it is still unknown what the market structure for these technologies will be.
“Artificial intelligence will change the real economy, improve productivity, and add wealth, but it will be a path full of obstacles.”
In its World Economic Outlook report, presented in Bangkok by the director of the IMF's Research Department, Silvana Tenreyro, the organisation states that global trade grew by 8.3% between 2023 and 2025, and that 29% of that growth was linked to AI-related exchanges. Without that component, the advance would have been 4.6%.
The Fund expects the boost from AI on global trade to weaken over time, although it also considers three scenarios. In the first, the boom coincides with real productivity gains and leads to an expansion of activity without inflation. In the other two, demand grows without an equivalent increase in production, which would raise inflation and could revise the return expectations for investments in AI.
The IMF estimates that the global economy will grow four tenths less than in 2025, the year it advanced by 3.5%, and forecasts an expansion of 3.4% in 2027. The projections include the Iran war, rising oil and other commodity prices, and increased investment in AI, which has cushioned some of the conflict's impact.
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