Kevin Warsh · Federal Reserve (FED) · Iran · Axios
Federal Reserve chairman Kevin Warsh said on Wednesday that the AI investment boom will likely raise prices over the next
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Warsh drew one of his clearest distinctions yet between the AI boom's immediate price effects and persistent inflation, a nuance that could shape policymakers' response as investment remains strong.
Key facts
- What they're saying: "Will it increase measured prices over the course of the next 12 months
- Federal Reserve chairman Kevin Warsh said on Wednesday that the AI investment boom will likely raise prices over the next year, but argued that those increases might not automatically be inflationary
- Whether that's inflationary or not, that's up to the Federal Reserve, and they're going to have something to say
- Warsh made the comments during the second day of his semiannual monetary policy testimony before Congress, a legally mandated appearance by the Fed chairman
Summary
Federal Reserve chairman Kevin Warsh said on Wednesday that the AI investment boom will likely raise prices over the next year, but argued that those increases might not automatically be inflationary. What they're saying: "Will it increase measured prices over the course of the next 12 months? Warsh said the AI boom is already driving capital spending and bidding up the price of chips, while policymakers are still largely guessing when the technology's broader productivity benefits will materialize. "The reporter doesn't view a one-time change in prices as necessarily being inflationary, because the reporter thinks there's a supply response in that way," he said.