San Francisco Federal Reserve President Mary C. Daly acknowledged AI's potential but flagged a familiar problem: regulation is getting in the way of the technology delivering sustained productivity growth.
Despite billions pouring into AI infrastructure, macroeconomic evidence for meaningful gains remains limited. Daly drew parallels to past tech revolutions, noting modest impacts in call centers, software development, and financial services.
She argued the Fed must dig into micro data and ramp up business outreach, similar to Alan Greenspan's strategy during the 1990s computing boom.
Daly highlighted state-level AI regulations as a potential drag, disproportionately burdening startups compared to larger companies. She emphasized that sustained gains depend on reorganizing work processes, not just adopting the tech.
For investors, the Fed's assessment of AI's impact feeds into its outlook on growth, inflation, and interest rates. If the Fed concludes AI isn't delivering yet, that removes an argument for a more optimistic outlook. The signal to monitor: the Fed's research publications and regional survey data, not headline GDP.