The Bank of Japan is widely expected to hold interest rates on Thursday at its first meeting since Sanae Takaichi, an advocate of easy monetary policy, became prime minister https://t.co/FR5jXYKGJ0 ...

Monetary Policy & Federal Reserve - Trump's monetary policy desires regarding interest rates and Federal Reserve independence should be taken seriously [1] - The idea of having the reserve currency is also a key consideration [1]

Focusing on the natural rate of interest is important not just to get monetary policy right, but also to confront the fiscal pit we're digging, says @Clive_Crook (via @opinion) https://t.co/FNDt4pd9RZ ...

Bitcoin's monetary policy for the next 100 years is set in stone https://t.co/bmH4FwgwBf ...

The European Central Bank’s monetary policy is well positioned but officials must react should data or forecasts shift, according to Governing Council member Olaf Sleijpen https://t.co/PCilTwKp5F ...

Monetary Policy - The ECB should adopt a calm approach to monetary policy [1] - Inflation is in line with the ECB's target [1]

US Treasury Secretary Scott Bessent said the yen will settle at an appropriate level if the Bank of Japan continues to conduct the right monetary policy, Japanese media reported https://t.co/6L8ashuuQk ...

Reserve Bank of Australia Governor Michele Bullock characterized the country’s monetary policy as “marginally tight” and added that her job guiding interest rates isn’t finished. https://t.co/cpEzpl1WRg ...

AI and the Federal Reserve - The Fed is dedicating significant attention to AI, with approximately 25% to 33% of Fed communications addressing the topic [2] - A Fed governor suggests policymakers should allow AI disruption, trusting long-term benefits will outweigh costs, similar to historical technology trends [2] - History indicates new technology fosters growth and employment, with capital and labor acting as complements [3] - The challenge for policymakers is to facilitate worker and firm adaptation, ensuring efficiency gains translate to higher wages and growth [3] AI's Impact on Labor and Productivity - AI-related job losses are currently managed through attrition and retraining, but layoffs are expected to increase, particularly for college-educated workers [5] - AI presents potential threats including fraud, disinformation, bias, and cybersecurity [6] - The Fed anticipates AI could deliver greater productivity, potentially allowing the Fed to operate at a lower rate [6] Regulatory Approaches and Investment - A Fed governor suggests the US approach of allowing technology to develop before regulating is superior to Europe's preemptive regulation [7] - The US approach is credited for the US leading Europe in the 1990s technological boom [7] - A report indicates AI investment may have peaked in the first half of the year [8] Monetary Policy Implications - One Fed governor suggests the neutral rate could be higher due to capital investment from AI [8] - The potential influence of AI on monetary policy, particularly regarding long-run rate outlook changes due to investment and productivity booms, remains a key consideration [9][10]

Core Insights - The Federal Reserve is increasingly focused on the implications of artificial intelligence (AI) for economic policy, with a significant portion of discussions dedicated to this topic [2][3] - The Fed governor emphasizes the historical trend that new technologies lead to economic growth and job creation, despite initial job losses [3][4] - There is a recognition of the challenges posed by AI, including potential job displacement, particularly among college-educated workers, but also an opportunity for retraining and adjustment [5][6] Group 1: Economic Impact of AI - The Fed governor believes that the disruption caused by AI should be embraced, as the long-term benefits are expected to outweigh the costs [2][3] - Historical evidence suggests that technological advancements typically result in greater employment and productivity, with capital and labor being complementary [3][4] - The transition period may involve job losses before the benefits of new job creation become apparent, highlighting the difficulty in forecasting future job markets [4] Group 2: Job Market Dynamics - Current AI-related job losses are primarily being managed through attrition rather than mass layoffs, with companies focusing on retraining employees [5] - Layoffs are anticipated to rise, particularly affecting workers with college degrees, as AI continues to evolve [5][6] - The Fed governor acknowledges that there will be both winners and losers in the AI landscape, with productivity gains being a key focus for the Fed [6] Group 3: Regulatory Perspectives - The U.S. approach to AI regulation, which allows technology to develop before implementing regulations, is viewed as superior to the European model of preemptive regulation [7] - This regulatory philosophy is credited with enabling the U.S. to lead in technological advancements during the 1990s [7] Group 4: Future Outlook - A Barclays report suggests that AI investment may have peaked in the first half of the year, indicating a potential shift in the investment landscape [8] - The Fed governor notes that increased capital investment from AI could lead to a higher neutral interest rate in the future [8][10] - The integration of large language models in analyzing Fed communications has been ongoing for nearly a decade, indicating a long-standing relationship between AI and economic policy discourse [9]