The Fed’s Warsh expects artificial intelligence to deliver substantial eventual benefits for wealth creation, while warning that its development will follow a “very bumpy” path. His assessment combined optimism about the technology’s ultimate economic value with caution about how that value will emerge.

Separately, interest-rate expectations showed traders favouring an unchanged rate. CME Fed Watch put the probability of the Fed leaving its interest rate unchanged at 72.3%. A majority of traders expected a 25 basis point increase at the December meeting.

Warsh declined to commit himself in advance to a monetary policy decision. “I don't prejudge meetings,” he said. The market expectations represent traders’ assessment of the likely outcome, rather than a commitment from Warsh.

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On AI, Warsh’s expectation that the technology would ultimately be “very good” for wealth distinguished the potential long-term benefits from the difficulties of development. The supplied remarks did not specify a timetable for those gains, quantify their size or explain how they might affect the Fed’s interest-rate decisions.