Warsh's AI-driven rethink of the Fed tests patience and policy

Fed chair Kevin Warsh is pursuing a dual strategy: modernize the Fed with AI to better gauge the economy in real time while using traditional policy tools to tame inflation, creating tension after a volatile market reaction to his July 29 briefing. He envisions fewer, more data-rich meetings and a broader use of AI to complement surveys, but for now the Fed remains ready to raise rates if needed to hit 2% inflation, balancing bold reforms with cautious execution.