Fed puts AI at center stage, weighing growth gains against inflation risks

Fed officials, led by Chair Kevin Warsh, have moved AI from a niche topic to a central policy question, debating whether AI will boost productivity and jobs without fueling inflation or instead add price pressures. Minutes show AI references rising since 2023–24, with Warsh posing questions about AI’s effect on living standards and employment while offering no definitive answers, and markets pricing in rate action as inflation remains the priority.