Warsh Opens AI Inflation Forum as Bitcoin Slips Below $69,000

Warsh will gather technology executives, economists and employers on Monday, November 16 in San Francisco to probe how artificial intelligence is reshaping the economy. The forum's findings could feed into how the Fed sets interest rates, the lever that decides whether investors chase risky assets like Bitcoin or park money in safer ground.

The chair has argued AI could let companies churn out more goods and services at lower cost, easing inflation without the Fed keeping borrowing expensive. Not everyone at the central bank agrees. Fed Governor Lisa Cook warned in September that AI investment was stoking inflationary pressure and delaying the return to the Fed's 2% inflation target.

The squeeze is physical. Data centers devour electricity, computer chips, construction materials and skilled labor, and when tech companies bid for those limited resources, prices climb. Warsh himself called AI “a new variable” for monetary policy back in August.

Bitcoin is already catching the fallout. The cryptocurrency fell below $69,000 Friday after stronger-than-expected inflation figures revived fears of another Fed rate hike. Fed Governor Michael Barr added his own warning Thursday about possible “serious short-term disruptions” as businesses swap human tasks for AI systems — job losses that could dent consumer spending and eventually push the Fed toward cuts, even as a weakening economy sends investors fleeing speculative bets.

AI is also muscling into Bitcoin mining's turf. Both sectors need massive amounts of power, and miners are under pressure to lock in cheap energy or pivot. Hyperscale Data shut down mining at its Michigan facility in September to make room for an AI customer under a deal potentially worth more than $1.2 billion, and CoreWeave and other former proof-of-work Ethereum miners have made similar moves.

Monday's conference won't settle the Fed's next rate decision, which lands December 9. But it should reveal how policymakers are reading a technology boom that now reaches from Wall Street into crypto wallets.