Warsh says Federal Reserve is closely watching AI

Fed follows AI developments

Federal Reserve Chair Kevin Warsh said Wednesday that the central bank is closely monitoring the development of artificial intelligence models.

The committee raised interest rates by a quarter point at that meeting.

Warsh’s statement identifies AI as an area receiving attention from the central bank as the technology develops rapidly. His remarks focused on the Fed’s interest in tracking those changes. They did not, on their own, connect AI developments to the committee’s quarter-point rate increase.

Rate decision and AI attention

The FOMC’s action and Warsh’s AI comments addressed two separate subjects during the same appearance. The committee’s decision changed interest rates by one-quarter of a percentage point, while Warsh’s remarks described the Fed’s attention to advances in AI models.

The distinction matters because the Fed chair’s statement establishes that officials are watching AI, but it does not establish that AI prompted the interest-rate decision. Warsh noted his interest in the technology after the committee acted, placing AI among the developments under the central bank’s observation.

Future comments from Warsh and the Federal Reserve could offer more detail about which AI developments officials are following and how that work fits into the central bank’s broader decision-making. The FOMC will continue to make rate decisions through its formal meeting process.