Fed's Warsh Says AI Will Change Monetary Policy Conduct

• AI is considered the 'most consequential change' to the US and global economy in his lifetime.
• AI will initially impact the demand side of the economy before the supply side, eventually acting as a 'positive supply shock' in the medium term.
• It will fundamentally change the conduct of monetary policy by providing better data and analytical tools, and will make economies more productive and create more wealth.
• The transition will be 'bumpy' due to uncertainties in technology understanding, market structures, and its future effect on employment.

Kevin Warsh, former Federal Reserve Chairman, describes AI as the most consequential economic change in his lifetime. He views it as a positive supply shock that will fundamentally alter monetary policy and boost productivity and wealth, though the short-term path will be bumpy with unknown effects on employment.