{"id":774487,"date":"2026-07-02T01:48:18","date_gmt":"2026-07-02T01:48:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/774487\/"},"modified":"2026-07-02T01:48:18","modified_gmt":"2026-07-02T01:48:18","slug":"kevin-warsh-downplays-concerns-of-job-losses-due-to-ai-says-hes-not-a-doomer-its-called-the-lump-of-labor-fallacy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/774487\/","title":{"rendered":"Kevin Warsh Downplays Concerns Of Job Losses Due To AI, Says He’s Not A Doomer \u2014 ‘It’s Called The Lump Of Labor Fallacy’"},"content":{"rendered":"

During an interview at the ECB Forum on Central Banking in Sintra, Portugal, Warsh said he believes the number of jobs created by AI will be greater and prosperity stronger.<\/p>\n

Warsh said he expects the U.S. to emerge as a major winner in AI in the medium term, noting that improvements in AI models are happening at an exponential pace.He added that AI technology represents a major paradigm shift for central bank policies and economies.Warsh also noted that the Fed is seeing the impact of the AI shock on the demand side, driven by soaring capital expenditures.<\/p>\n

Federal Reserve Chair Kevin Warsh on Wednesday downplayed concerns that artificial intelligence will lead to job losses, saying he is not an AI doomer or pessimist.<\/p>\n

During an interview at the ECB Forum on Central Banking in Sintra, Portugal, Warsh said he believes the number of jobs created by AI will be greater and prosperity stronger.<\/p>\n

\u201cIt\u2019s called the lump of labor fallacy for a reason. Who knew when the internet was born that the internet was going to create a million and a half jobs as Uber drivers? We\u2019re only in the first or second inning of this revolution,\u201d he added.<\/p>\n

Warsh Expects US To Be A Big Winner In AI<\/p>\n

Warsh said he expects the U.S. to emerge as a major winner in AI in the medium term, noting that improvements in AI models are happening at an exponential pace.<\/p>\n

\u201cThe U.S. is not afraid of productivity-led economic growth, but we don\u2019t view the economics of this as zero-sum. We\u2019re not rooting for another country to fail, we\u2019re rooting for economic growth to be broad-based. That\u2019s good for the United States\u2026 it will make all of our jobs easier,\u201d he added.<\/p>\n

Warsh said that AI technology represents a major paradigm shift for central bank policies and economies.<\/p>\n

However, the Fed Chair said the central bank would monitor the pace of AI advancements and their impact on inflation and jobs as it seeks to balance its dual mandate of maximum employment and stable prices.<\/p>\n

Seeing Impact Of AI Shock On Demand Side, Says Warsh<\/p>\n

Warsh also noted that the Fed is seeing the impact of the AI shock on the demand side, driven by soaring capital expenditures. He added that he is confident this will also be reflected on the supply side eventually, while noting that the Fed is spending most of its time monitoring these developments.<\/p>\n

Warsh also said that this is a good problem to have, rather than the \u201cfinancial engineering\u201d that companies undertook by buying back their own shares.<\/p>\n

\u201cRight now they\u2019re investing in the future because their expectation is that the supply side of the economy will expand, and if it does, that has huge implications for monetary policy. But again, I\u2019m not going to make a judgment now,\u201d he added.<\/p>\n

Warsh Says Prices Are \u2018Too High\u2019<\/p>\n

Speaking about inflation, Warsh said prices are currently \u201ctoo high,\u201d adding that central bank officials have become more open-minded about the impact of AI.<\/p>\n

\u201cWe\u2019re all in the price stability business, that might not be our only business, but if there was a common thing I heard over the last couple of days, it was open-mindedness on these questions of AI, open-mindedness on productivity. But we\u2019ve all looked around, and we\u2019ve seen that prices are too high,\u201d he said.<\/p>\n

However, Warsh said that inflation expectations and risks have declined over the past four weeks. He also reiterated that the Fed will remain independent and that there will be no changes on that front.<\/p>\n

Warsh\u2019s comments come at a time when the Fed\u2019s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Index,\u00a0advanced<\/a> 4.1% in May on an annualized basis, the highest level since October 2023.<\/p>\n

Meanwhile, U.S. equities declined in Wednesday\u2019s opening trade. At the time of writing, the\u00a0SPDR S&P 500 ETF<\/a> (SPY), which tracks the S&P 500 index, was down 0.17%; the\u00a0Invesco QQQ Trust ETF<\/a> (QQQ) fell 0.9%; and the\u00a0SPDR Dow Jones Industrial Average ETF Trust<\/a> (DIA) edged lower by 0.04%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in \u2018bearish\u2019 territory.<\/p>\n

The iShares 20+ Year Treasury Bond ETF (TLT) was down 0.9% at the time of writing, while the iShares 7-10 Year Treasury Bond ETF (IEF) fell 0.46%.<\/p>\n

Also See:\u00a0Alex Karp Touts Palantir-Nvidia Partnership For Secure AI, Criticizes OpenAI And Anthropic Over Lack Of IP Protection<\/a><\/p>\n

For updates and corrections, email newsroom[at]stocktwits[dot]com.<\/p>\n

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Read about our editorial guidelines and ethics policy<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"During an interview at the ECB Forum on Central Banking in Sintra, Portugal, Warsh said he believes the…\n","protected":false},"author":2,"featured_media":774488,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[140455,47279,45,49,48,46,274781,2071,35755,274780,274782],"class_list":["post-774487","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-ai-capex","tag-ai-job-loss","tag-business","tag-ca","tag-canada","tag-economy","tag-fed-chair-warsh","tag-federal-reserve","tag-kevin-warsh","tag-kevin-warsh-ai","tag-kevin-warsh-fed"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/774487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=774487"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/774487\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/774488"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=774487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=774487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=774487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}