The Federal Reserve assembled a task force to advise Chairman Kevin Warsh on artificial intelligence. Warsh likes AI. The three people he picked for the task force also like AI. This is what passes for intellectual diversity at the central bank.
Imagine spending decades climbing the ladder of monetary policy. Surviving the academic gauntlet. Publishing papers nobody reads. Attending conferences in Basel where the coffee costs eighteen dollars. All so you can sit on a committee where everyone already decided the answer before the first meeting.
The task force exists to advise. Advising requires disagreement or at least the possibility of it. When all four people in the room share the same embrace of technology—and yes that's the word they used, embrace, like they're hugging a chatbot—the advice becomes a formality. A rubber stamp with extra steps.
Retail traders will see this headline and think it matters. They'll imagine Warsh and his three apostles building models that predict inflation using neural networks. They'll picture algorithms that spot recessions before they happen. They'll buy tech stocks on Monday morning because the Fed likes computers now.
The Fed liked computers yesterday too. And last year. They've had Bloomberg terminals since the nineties. Adding AI to the mix changes nothing about interest rates or reserve requirements or any mechanism that actually moves markets. But the task force makes for a clean press release.
Warsh could have picked skeptics. People who think AI is overrated or dangerous or just another bubble waiting to pop. He could have sought actual debate. Instead he picked people who already agree with him, which means the task force will produce exactly the recommendations he wanted before it formed.
Your trading account doesn't care who advises the Fed on artificial intelligence. It cares about rate decisions. Those come from humans who still can't predict inflation six months out, with or without machine learning.
Photo by Marija Zaric on Unsplash
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