Fed officials warn AI's economic costs may arrive faster than benefits

Several Federal Reserve officials warn AI's economic costs may outpace benefits. They argue that AI-related investment boosts demand for labor, equipment and infrastructure. The message is part of a broader debate under Kevin Warsh's leadership. Fed officials see stronger demand signals than productivity gains from AI. This positions AI's role in inflation as a key policy question. The Fed may adjust monetary policy based on observed economic impacts of AI.