Fed Chair Kevin Warsh Avoids Rate Signals, Warns AI Growth Will Be Bumpy

Federal Reserve Chair Kevin Warsh declined to comment on whether central bankers will adjust borrowing costs at their meeting on October 27–28. Speaking at the IMF-World Bank annual meetings in Bangkok, Warsh stressed that policymakers will decide policy meeting by meeting and will no longer provide advance guidance on future interest rate moves. He also commented on artificial intelligence, describing the technology as a major transformative force for the U.S. and global economies while cautioning that the transition would be unpredictable and difficult to navigate.

The policy stance keeps financial markets guessing after the Federal Reserve raised its target interest rate range by 25 basis points to 3.75%–4% in September to help curb inflation. Despite the lack of formal guidance, market pricing indicates a high likelihood that rates will remain unchanged later this month. At the same time, Warsh noted that while AI offers long-term potential to boost wealth and worker productivity, near-term spending on technology infrastructure could add to inflation, and the impact on employment remains uncertain.

Investors will look ahead to the Federal Reserve’s October 27–28 policy gathering to see if officials maintain current benchmark rates or resume monetary tightening. Market participants will also monitor ongoing inflation data and job metrics, alongside corporate capital spending on artificial intelligence, to assess both immediate interest rate expectations and broader economic trends.