Fed Chair Kevin Warsh will lead a forum on AI's effect on inflation, productivity and employment. The outcome could shape interest-rate policy, a major factor in Bitcoin's price. Fed officials disagree on whether AI will cool or fuel inflation.
Federal Reserve Chair Kevin Warsh will convene a public forum Monday to examine whether artificial intelligence will bring down inflation, drive prices higher, or replace American workers. The November 16 conference in San Francisco will gather technology executives, economists and employers.
The findings could influence how the Fed approaches interest rates, which matter for Bitcoin because investors weigh risky assets against safer alternatives.
Fed officials split on AI and prices
Warsh has argued that AI could help companies produce more at lower costs, easing inflation without requiring the Fed to keep borrowing expensive. But some of his colleagues see a different problem. Fed Governor Lisa Cook warned in September that AI investment was adding inflationary pressure and delaying the return to the Fed's 2% target.
Lower rates generally make risky assets like Bitcoin or tech stocks more attractive. Yet if AI spending keeps inflation elevated, the Fed could hold rates high or raise them further, which could potentially drain money from speculative investments, including cryptocurrencies.
Bitcoin already feels the pressure
Bitcoin dropped below $69,000 Friday as stronger-than-expected inflation figures fueled concerns about another Fed rate hike.
AI also competes with the Bitcoin industry for electricity. Hyperscale Data shut down mining operations at its Michigan facility in September to accommodate an AI customer under a deal potentially worth more than $1.2 billion.
Jobs risk adds a complication
Fed Governor Michael Barr warned Thursday of possible serious short-term disruptions as businesses replace human tasks with AI systems. Widespread job losses could weaken consumer spending and slow growth, but a deteriorating economy could also push investors away from Bitcoin.
Monday's conference will not determine the Fed's next rate decision, scheduled for December 9. It could still offer clues about how policymakers view the AI boom.
Source: Decrypt
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