Fed governor Barr believes that AI will change the economy, but the outcome is still uncertain.

Federal Reserve Governor Michael Barr stated that although artificial intelligence will change the economy, there are many possible outcomes. Barr outlined two basic scenarios in his prepared remarks for the Singapore Fintech Festival on Wednesday. The first scenario is that the application of generative AI can enhance existing tasks and roles. The second scenario is that it may bring about transformative impacts, leading to fundamental changes in work and leisure styles, increasing efficiency, and resulting in changes in business models and reshaping enterprises. "It is currently difficult to predict which scenario will ultimately prevail," he said. He pointed out in his speech that a survey conducted by the New York Fed showed that AI has already led employers to reduce hiring plans. The Federal Reserve Governor stated that this could lead to a slowdown in job growth, but he did not comment on the near-term prospects for monetary policy. He also noted that the tens of trillions of dollars in capital expenditures planned in the data center field could bring about significant economic changes, including productivity improvements.