Axios: Warsh rewires the Fed

Posted on August 10, 2026 by michelleclarke2015
Warsh rewires the Fed
 
Photo illustration of Federal Reserve Chairman Kevin Warsh with numbers and stock market graphics in the background
Photo illustration: Sarah Grillo/Axios. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images
 
Federal Reserve Chair Kevin Warsh is attempting a high-wire act: rethinking the central bank’s approach to guiding the economy, while also using its standard toolkit to bring down stubbornly persistent inflation, Axios chief economic correspondent Neil Irwin reports.

A market blowup late last month showed the perils of doing both at the same time.

The big picture: Warsh is ultimately trying to rewire the central bank to take greater advantage of AI to understand the economy in real time, aiming for better decision-making in the next few years.

Some saw his July 29 news conference as evidence of a lack of commitment to quashing inflation — but to allies, it was a short-lived bump in the road toward a more credible Fed.

🔭 Zoom out: Warsh’s supporters frame a couple of volatile trading days as a small price to pay for a world where markets are less dependent on central bank handholding.

He seeks a paradigm shift in how the Fed uses AI — but those tools will take time to develop and prove workable, and meanwhile inflation has been elevated for more than five years.

In the near term, the Warsh Fed is prepared to use its standard tool of raising short-term interest rates to combat inflation, based on tried-and-true analysis of government economic statistics.

The intrigue: Warsh is a full-throated believer that AI is a transformative technology that stands to remake the economy.

He has told associates that before taking office, he built AI bots that ingested the collected works of economists Milton Friedman and James Tobin. He then turned to them for their insights on contemporary economic questions.

He also sees its use as an urgent need for the Fed itself to more fully embrace AI, both to understand what’s happening in the economy at any given moment and to reason toward better policy decisions.

His aspiration is that eventually, real-time information from retailers, banks and other companies can give a more reliable guide to what’s happening to inflation and growth than government surveys.

Reality check: Warsh leads a 112-year-old central bank with a $6.7 trillion balance sheet, which sits at the core of global finance.

There’s a reason it is historically cautious and slow to change, even with an approach that co-workers describe as pragmatic and collegial.

The bottom line: Expect the Warsh Fed to keep pushing boundaries of how technology can shape economic data and policymaking — but with more reassurance that for now, the basic Fed toolkit remains intact.Share this story. … 

Sign up for Neil’s Axios Macro newsletter.
Unknown's avatar

About michelleclarke2015

Life event that changes all: Horse riding accident in Zimbabwe in 1993, a fractured skull et al including bipolar anxiety, chronic fatigue …. co-morbidities (Nietzche 'He who has the reason why can deal with any how' details my health history from 1993 to date). 17th 2017 August operation for breast cancer (no indications just an appointment came from BreastCheck through the Post). Trinity College Dublin Business Economics and Social Studies (but no degree) 1997-2003; UCD 1997/1998 night classes) essays, projects, writings. Trinity Horizon Programme 1997/98 (Centre for Women Studies Trinity College Dublin/St. Patrick's Foundation (Professor McKeon) EU Horizon funded: research study of 15 women (I was one of this group and it became the cornerstone of my journey to now 2017) over 9 mth period diagnosed with depression and their reintegration into society, with special emphasis on work, arts, further education; Notes from time at Trinity Horizon Project 1997/98; Articles written for Irishhealth.com 2003/2004; St Patricks Foundation monthly lecture notes for a specific period in time; Selection of Poetry including poems written by people I know; Quotations 1998-2017; other writings mainly with theme of social justice under the heading Citizen Journalism Ireland. Letters written to friends about life in Zimbabwe; Family history including Michael Comyn KC, my grandfather, my grandmother's family, the O'Donnellan ffrench Blake-Forsters; Moral wrong: An acrimonious divorce but the real injustice was the Catholic Church granting an annulment – you can read it and make your own judgment, I have mine. Topics I have written about include annual Brain Awareness week, Mashonaland Irish Associataion in Zimbabwe, Suicide (a life sentence to those left behind); Nostalgia: Tara Hill, Co. Meath.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a comment