Incoming Fed Chair Warsh: AI Will Drive a Productivity Boom That Won't Be Inflationary!

Kevin Warsh, set to become the next Federal Reserve Chair, is making a bold macro call: artificial intelligence will make "almost everything cost less" and the US economy is at "the front end of a productivity boom" that won't be inflationary. The remarks carry significant weight given the role he is stepping into.

The framing is notable for rate-watchers. If the incoming Fed Chair believes AI-driven productivity growth is structurally disinflationary, the policy calculus shifts — growth no longer automatically triggers tightening. That's a meaningful signal for both equity and crypto markets pricing in the rate path.

For risk assets, a Fed leadership that views AI as a deflationary force rather than a demand accelerant is a constructive backdrop. It opens the door to rate cuts even in a growing economy — a combination markets have been waiting on.