Daly Says AI Barely Dents Jobs, Won't Blame It for Inflation

San Francisco Fed President Mary Daly isn't blaming the robots. Speaking Thursday at the Economic Policy in the Age of AI Policy Forum, she said AI has so far had a "limited impact" on the jobs market. Could AI push prices higher down the road? Sure, she said — but right now it's not the main driver of inflation.

Daly also pushed back on tunnel vision. Just because the Fed is fighting inflation today, she argued, that shouldn't mean it ignores the chance that productivity growth turns out to be disinflationary.

Her colleagues are sounding far more alarmed about prices. Chicago Fed President Austan Goolsbee said Thursday that inflation is "way above" the central bank's target, describing it as the third or fourth straight month of bad readings and warning that in several ways it looks like it's moving the wrong direction. He wants the Fed to stay "sober-minded."

Cleveland Fed President Beth Hammack pointed to "real demand pressures" behind high inflation, plus secondary pressure from energy costs. She said the Fed has been missing its inflation mandate for years and that more restrictive policy is needed — though she prefers steadier rate increases so the economy has time to adjust. Hammack has backed hikes and favored one at the July meeting.

Vice Chair for Supervision Michelle Bowman said Tuesday that persistent inflation and firming labor market conditions mean there is "still work to do" to reach target. Meanwhile, the Fed quietly thinned out its calendar: it dropped the October policy meeting from next year's schedule, leaving seven scheduled meetings instead of the usual eight, after October inflation came in higher than expected for a second month running.