The CEO of the Federal Reserve Bank of San Francisco expressed optimism in regards to the impact of artificial intelligence on employment, noting that while corporations still must determine find out how to get essentially the most profit from the technology, she is seeing early signs that AI helps employees fairly than hurting them.
Mary Daly, who oversees a region of the Federal Reserve Bank that features Silicon Valley in its nine western states, spoke in regards to the state of the labor market on the Fortune Brainstorm Tech conference on Monday, but declined to offer any indication as to when the subsequent rate cut might come.
In a wide-ranging interview on stage in Deer Valley, Utah, Daly said the technology sector remains to be on the rise “because it brings us all kinds of new things. It helps us do better business, improve the way we live and make the world a better place.”
The US labor market, which has been tight since 2021, is now weakening, Daly said. The US unemployment rate reached 4.1% in June, a two-and-a-half-year high, in keeping with the Office of Labor Statistics. Companies are on the lookout for ways to satisfy demand and get things done faster. She talked about Honeywell, which had a labor shortage and used AI to grow its workforce fairly than replace its employees.
“They replaced tasks, not people, and people focused on other things,” Daly told an audience of enterprise capitalists and technology entrepreneurs.
“No technology in the history of all technology has reduced employment, not net,” she added.
The Federal Reserve was also expected to chop rates of interest not less than once this 12 months, but this has not happened up to now. Inflation has remained stubborn, which has made the Fed wary of rate cuts, in keeping with CBS NewsDaly said she expects a “policy adjustment over the course of the next legislative session,” but declined to offer any indication of what number of rate cuts there is perhaps or when.
Daly was also asked how rate cuts could affect the valuations of booming technology corporations like Nvidia. The chipmaker currently has a market cap of $3.16 trillion. Technology corporations’ valuations fluctuate in ways that are not all the time tied to the economy, she said. “How a change in interest rates will affect valuations is not clear,” Daly said.
Daly also reacted cautiously to the query about Donald Trump’s likely return to the White House. The Fed is required by Congress to stay independent, even when faced with a hostile presidential administration, Daly said. The Fed’s most significant asset is its integrity, while its most significant tool is the trust of the people, she said. “The American people are our shareholders. We must earn their trust and respect by [doing] great work,” she said.
