Hope for the best, plan for the worst in AI trade, says Fmr. CEA Chair Jared Bernstein

Economic Outlook - Consumer spending, adjusted for inflation, has been flat from December to May, showing a slight negative trend of -0.21% [3] - The American consumer has been a key driver of GDP, accounting for 70% [4] - The flatness in consumer spending could be due to consumers frontloading imports in anticipation of tariffs [4] Fiscal Policy & Debt Management - The Treasury plans to update on how it intends to finance the nation's debt [5] - The current administration criticized the prior administration for timing the issuance of debt in the bond market [6] - The federal debt has significantly increased due to the current budget bill [7] - An increase in the debt-to-GDP ratio by one point tends to add approximately two basis points to the interest rate [8] Impact of AI - There's hope that AI will generate enough productivity growth to offset some of the financial pressures [9][10] - Historically, technological changes have not had the dramatic productivity-enhancing effects that are being claimed for AI [11] - Relying on AI to solve federal budgeting issues is considered reckless [11]