Fed Governor Barr: AI to Lift Productivity Over Long Run, but Rate Impact Unclear

Federal Reserve Governor Barr said on Sept. 30 that it is reasonable to consider artificial intelligence as a contributor to productivity growth in the medium term, though the specific ways and timing are hard to predict. He expressed optimism about AI raising productivity over the long run.

Barr said it is still too early to determine whether AI will push up the neutral interest rate. Broad productivity gains may take time, but the surge in investment from AI buildout and related demand has already had measurable effects on prices.