Federal Reserve Speeches·Aug 28, 2026, 10:00 AM ET

Warsh, In Our Time

The speaker marks their 100th day as Chairman of the Federal Reserve during a conference in Jackson Hole.
Artificial intelligence is identified as a new factor of production with potential to drive substantially higher economic growth.
Token sales for leading AI labs have increased over 500 percent year-over-year to more than $100 billion annually.
The Fed is establishing a task force to study the impact of AI on productivity, labor markets, & market structure.
The speaker expresses discomfort with forward guidance as a regular practice in normal times due to risks of ambiguity & market distortion.
A "hall-of-mirrors" problem is warned against where markets rely too heavily on Fed guidance while the Fed relies on market prices.
The speaker rejects mechanical reaction functions like the Taylor rule, citing the changing nature of the economy & limitations in forecasting.
Key monetary policy principles include prioritizing contemporaneous data, treating the 2 percent inflation target as fixed, & viewing short-term rates as the primary tool.
Money creation by both the central bank & the banking system is emphasized as relevant to monetary policy.
The economy shows resilience with business capital expenditures rising rapidly & corporate profits growing over 20 percent.
Labor markets are described as stable with a 4.1 percent unemployment rate consistent with full employment.
Inflation remains a concern, with the 12-month PCE price index at 3.7 percent & the six-month change at 4.1 percent.
Disaggregated PCE data reveals that nearly half of goods & services show price increases above 3 percent.
Inflation expectations remain anchored in the medium term, though the speaker asserts the Fed bears responsibility for past elevated inflation.
The speaker commits to a discipline of sound policy rather than a specific decision, prioritizing price stability as the predominant focus.