Federal Reserve Chair Kevin Warsh said Wednesday that the central bank is closely tracking the rapid advancement of artificial intelligence, underscoring the growing economic significance of the technology even as Washington remains deadlocked over how to regulate it.
“We care very much about what’s happening in artificial intelligence,” Warsh told reporters following the Federal Open Market Committee’s decision to raise interest rates by a quarter point. He said he is particularly interested in how AI could reshape both the demand and supply sides of the economy.
The Fed’s focus comes amid mounting concerns about job displacement. According to a July report from Apollo Global Management, roughly 5.8 million American workers are in fields with “high exposure” to AI-driven automation. Warsh said his internal task force on AI’s economic impact is expected to deliver a report by the end of the year.
But Warsh was quick to delineate the Fed’s role. “The policy decisions that are made about the risks and rewards, the challenges and opportunities [of AI], those are decisions made by other parts of the government,” he said. “I’m going to leave it to them to make those … political decisions, those policy decisions.”
His comments come as lawmakers in both parties have voiced alarm about AI’s capabilities. Researchers have warned of systems that could soon outperform humans in many domains. Jacob Coxon, a former researcher at Anthropic and OpenAI, wrote on X that “these will soon be superhuman systems that can hack anything, revolutionize any field overnight, and acquire real power and resources.” He added that those building AI models “earnestly believe that it could kill us all by the end of the decade.”
Anthropic CEO Dario Amodei, Coxon’s former boss, has called for a slowdown in AI development to allow safety measures to “keep up.” In a recent essay, Amodei argued that “society must have a say in how this technology is used, and more time for the necessary public deliberations — which pacing the frontier would bring us — is surely a good thing.”
Despite these warnings, Congress has made little progress on AI legislation. The House is heading into a seven-week recess starting Wednesday, and the Senate is scheduled to be out for nearly all of October and eight days in November. Lawmakers are also grappling with a potential government shutdown in December and the stalled farm bill.
“Do you think we’re capable of regulating AI? I mean, we can’t pass a budget, you think we’re going to have some great bill on AI?” Sen. Rick Scott (R-Fla.) told The Hill on Tuesday, reflecting widespread skepticism about congressional action.
President Trump has taken a more hands-off approach, arguing that the U.S. must outpace China in AI development and avoid overregulation. On Monday, he insisted the federal government already has “tremendous CRIMINAL and REGULATORY power” over AI companies, and accused critics of being part of a “SICK conspiracy” against AI and data centers that only benefits China.
The Fed’s rate hike, defying Trump’s public demands for a cut, adds another layer of tension between the White House and the central bank. Warsh’s remarks on AI suggest the Fed is positioning itself as a data-driven observer, even as the political branches struggle to craft a coherent response.
