HomeFinanceSF Fed Reserve Chief Mary Daly: A.I. replaces tasks, not people

SF Fed Reserve Chief Mary Daly: A.I. replaces tasks, not people

The Impact of Artificial Intelligence on Jobs: A Fed Reserve CEO’s Perspective

Introduction

The CEO of the San Francisco Federal Reserve bank, Mary Daly, recently shared her thoughts on the impact of artificial intelligence (AI) on jobs. In an interview at the Fortune Brainstorm Tech conference, she expressed an upbeat view on AI’s effect on employment, citing early indications that AI is helping workers more than harming them.

The State of the Labor Market

Daly oversees a Federal Reserve bank region that includes Silicon Valley among its nine Western states. She noted that the U.S. labor market, which has been tight since 2021, is now softening. The unemployment rate reached 4.1% in June, a two-and-a-half year high, according to the Bureau of Labor Statistics. Firms are looking for ways to meet demand and do things more quickly.

AI’s Impact on Jobs

Daly spoke about Honeywell, which had a labor shortage and used AI to augment its workforce instead of replacing its workers. "They were replacing tasks not people and people were getting oriented to do other things," she said. She added that no technology in history has reduced employment, not net.

The Federal Reserve’s Role

The Federal Reserve has been expected to cut interest rates this year at least once, but has yet to do it. Inflation has remained stubborn, which has made the Fed leery of cutting rates. Daly said she expects a "policy adjustment over next coming terms," but wouldn’t give a hint on how many rate cuts might come or when.

Valuations of Technology Companies

Daly was questioned on how rate cuts might impact the valuations of booming technology companies like Nvidia. She said that valuations of tech companies move around in ways that are not always tied to the economy. "How a change in interest rates will affect valuations isn’t clear," Daly said.

The Fed’s Independence

When asked about Donald Trump’s anticipated return to the White House, Daly was circumspect. The Fed is charged by Congress to remain independent even if it is faced with a presidential administration that is hostile. The Fed’s most important asset is its integrity, while its most important tool is the trust of the people, she said. "The American people are our shareholders. We have to earn their trust and respect by [doing] great work," she said.

Conclusion

In conclusion, Mary Daly, CEO of the San Francisco Federal Reserve bank, has expressed a positive view on the impact of AI on jobs. She believes that AI is helping workers more than harming them, and that it is bringing new opportunities and innovations. While the Federal Reserve is expected to cut interest rates this year, Daly was cautious in her predictions, citing the need for further analysis. The Fed’s independence is also crucial, as it is responsible for maintaining the trust and respect of the American people.

FAQs

Q: What is the current state of the labor market?

A: The U.S. labor market is softening, with the unemployment rate reaching 4.1% in June, a two-and-a-half year high.

Q: How is AI impacting jobs?

A: According to Mary Daly, AI is helping workers more than harming them. Companies like Honeywell are using AI to augment their workforce instead of replacing it.

Q: Will the Federal Reserve cut interest rates this year?

A: The Federal Reserve has been expected to cut interest rates this year, but Daly was cautious in her predictions, citing the need for further analysis.

Q: How will rate cuts impact the valuations of technology companies?

A: Daly said that valuations of tech companies move around in ways that are not always tied to the economy, and that it’s unclear how a change in interest rates will affect valuations.

Q: Is the Federal Reserve independent?

A: Yes, the Federal Reserve is charged by Congress to remain independent even if it is faced with a presidential administration that is hostile.

Author: fortune.com

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