Summary
The article discusses how the Federal Reserve might respond if artificial intelligence (AI) replaces a large number of human jobs. It explains that the Fed could lower interest rates to help maintain employment, even if the economy is growing due to increased productivity from AI. The Fed's legal mandate prioritizes stable prices and maximum employment.
Key Facts
- The Federal Reserve may lower interest rates if AI causes significant job loss.
- The Fed's main goals are stable prices and maximum employment, according to its mandate.
- Artificial intelligence could lead to high economic growth but also high unemployment.
- The Fed typically doesn't cut rates during strong economic growth, but job loss might change that.
- The Fed has experience using low interest rates to help job markets in past "jobless recoveries."
- Jerome Powell and Mary Daly have emphasized the Fed's mandates of price stability and employment.
- The Fed can't directly solve job market issues but can support job creation by influencing interest rates.
