Fed Chair Warsh taps Marc Andreessen and tech leaders to reshape central bank's AI strategy

Outsiders with major chops lead Fed task forces

The big picture: The task forces consist of economists and business leaders who bring serious credibility to the table but also are not part of the "Fed Borg" -- that is, not among the usual lineup of people who have recently worked at the central bank. * It is particularly telling that the task forces are lean, with three members assigned to each (with support from Fed staff). * As anyone familiar with organizational dynamics knows, a three-person committee is more likely to arrive at crisp, potentially contrarian ideas than a larger and more unwieldy panel would. Catch up quick: The task force leaders include a leading venture capitalist (Marc Andreessen), a former Walmart CEO (Doug McMillon) and former central bank heads (Mervyn King, Raghuram Rajan, Arminio Fraga). * Top-flight economists include Harvard's Raj Chetty and Greg Mankiw and Nobel laureate Thomas Sargent. * The full lineup -- and their assignments -- is here. State of play: The panels are tasked with coming up with recommendations for the policy-setting Federal Open Market Committee by year-end, on topics including Fed communications, economic data collection, AI and productivity. * That's a lightning-fast pace by the standards of Fed policy frameworks. Between the lines: Even of those task force members who have worked at the Fed, none have done so recently. (Peter R. Fisher ran the New York Fed's markets desk a quarter-century ago, Karen Dynan left the staff in 2009, and Jeremy Stein's time as a governor ended in 2014.) * While the panels include plenty of people who have expressed skepticism of elements of modern central bank orthodoxy, they do not do so from a systematically hawkish or dovish frame. * They also don't come at things from a politically partisan lens, even those who have served in a presidential administration (as Mankiw did for President George W. Bush and Dynan, for President Obama). Zoom in: We're particularly intrigued by the panel on economic data collection. * Chetty is perhaps the world's leading expert in using administrative data -- actual records of individuals' actions, as opposed to survey results -- to glean economic insights. * He is deeply versed in the thorny analytical, technical and legal challenges in deriving useful information from vast troves of privacy-sensitive data. * While McMillon is at first glance an unconventional choice, his inclusion aligns with an observation we've often made over the years: Why does it take the Census Bureau weeks to produce an estimate of retail sales, while the Walmart CEO gets fresh data every day? The intrigue: The task force on AI, labor markets and productivity is sure to generate interesting discussions, but could be the hardest to predict how its insights may map onto monetary policy. * Andreessen is a techno-optimist who is bullish on AI's potential to create jobs; Stanford economist Charles I. Jones, currently on leave at the AI firm Anthropic, sees a productivity boom underway; and Microsoft executive Asha Sharma is in the trenches of wrestling with AI-driven change. Reality check: The task forces have no power on their own, but rather their influence will rest on their ability to persuade the FOMC that their critiques hold up to criticism. The bottom line: "The experts chosen skew some to those who differ in at least some respects with current Fed practice," Evercore ISI's Krishna Guha and Gang Lyu wrote in a note.

Fed Chair Kevin Warsh Names Members Of Reform Task Force

Get personalized, AI-powered answers built on 27+ years of trusted expertise. The future of the Fed is in the hands of a group of bankers, business leaders, academics, and even a video game executive. On Thursday, Fed Chair Kevin Warsh released the names of the members of five task forces he established to rethink key aspects of how the central bank does business. Reforming the Fed's operations is a top priority for the new Fed chair, who announced the existence of the task forces at his first press conference last month. The groups will recommend changes to the Fed's communications with the public; its approach to controlling inflation; its use of economic data; its balance sheet of financial assets; and its view of the changes AI technology could bring to the economy. Here's who Warsh tapped to lead those task forces. Four of the 15 are professors at Harvard, where Warsh studied law. Communications The communications task force will "Review how the Federal Reserve conveys policy deliberations and decisions amid uncertainty." Warsh has said he wants to overhaul the Fed's communications, and has already changed it by eliminating "forward guidance" from the Federal Open Market Committee's official statement. This task force includes two former central bankers from other countries: Mervyn King, former Governor of the Bank of England and Arminio Fraga, former president of the Central Bank of Brazil. Rounding out the group is Peter R. Fisher, who served as under secretary of the Treasury in the George W. Bush administration, and was an executive at investment company Black Rock and the Federal Reserve Bank of New York. Balance Sheet Policy This group will "Examine the costs, benefits, and institutional implications of the Federal Reserve's current balance sheet regime," which includes $6.7 trillion worth of treasuries and mortgage-backed securities purchased during the Great Financial Crisis and the pandemic to stabilize financial markets. Warsh has said he wants to reduce its size. The task force comprises three academics: Jeremy Stein, a professor of economics at Harvard and former Fed governor; Karen Dynan, a Harvard professor who was formerly under secretary of the Treasury under Barack Obama; and Raghuram Rajan, a professor of finance at the Chicago Booth School of Business who was an official at India's central bank. Data The data task force looks to "improve the quality and timeliness of real economic signals that inform the Federal Reserve's policy judgments." Warsh has said he wants to rethink how the Fed measures key aspects of the economy including inflation. Leading that effort will be Raj Chetty, a professor of economics at Harvard; former Walmart CEO Doug McMillon; and Kevin Murphy, a professor of economics at the University of Chicago. Productivity and Jobs The group will "Assess the economic impact of new general-purpose technologies, including artificial intelligence, to inform the Federal Reserve's policy judgments." Warsh has said he believes AI technology will make the economy more productive in the long run, and serve to push down inflation, although he has said the timing of when the economy could see those benefits is uncertain. Warsh's AI task force includes tech financier Marc Andreessen; Charles I. Jones, professor of economics at Stanford University, who is currently working at AI company Anthropic to assess AI's risks to the economy; and Asha Sharma, CEO of the XBOX video game division at Microsoft. Inflation Frameworks This group will "Revisit how the Federal Reserve understands and responds to the drivers of inflation." It includes the fourth Harvard professor, economist Greg Mankiw, an economic advisor to George W. Bush; Thomas J. Sargent, a Nobel Prize-winning professor of economics at New York University; and William White, a Canadian economist sometimes credited with having predicted the 2008 financial crash, a senior fellow at the C.D. Howe think tank in Toronto.

Raghuram Rajan, Karen Dynan to co-lead Fed task force reviewing central bank's $6.7 trillion balance sheet

Federal Reserve Chair Kevin Warsh announced five task forces to suggest operational changes. These groups will include prominent economists and business leaders from various fields. One task force will examine artificial intelligence's impact on productivity and jobs. Another will focus on evaluating the central bank's data sources. These efforts aim to improve the Fed's analytical tools and policy approaches. Washington: Venture capitalist Marc Andreessen, economist Raj Chetty and former Bank of England governor Mervyn King are among a slate of names released by the Federal Reserve Thursday that will help develop recommended changes to the central bank's operations. They are among the co-leaders of five different task forces announced by Fed Chair Kevin Warsh last month. The other leaders are a mix of public officials and business leaders. Also read: Is India's economic growth real? Raghuram Rajan says something is off Warsh called for "regime change" at the Fed last year while he was under consideration by the Trump administration to replace former chair Jerome Powell. Warsh has sought to communicate less about the Fed's thinking on interest rates and has said he wants to reduce the central bank's roughly $6.7 trillion in holdings of government bonds. Yet it's not yet clear how transformative the task forces will be. Most of the directors announced Thursday are leading figures in economics and business, rather than longtime Fed critics. Warsh's use of task forces, Fed-watchers say, suggest he wants to persuade his fellow Fed officials of any changes rather than impose them. "The U.S. economy has changed significantly over the last generation, and never more so than right now," Warsh said in a written statement. "Each task force will carefully consider whether policymakers' means and methods, analytical tools and policy approaches can be improved upon." The five task forces will each have three co-leaders and will be supported by Fed staff, the central bank said. One of the task forces will focus on how artificial intelligence and other new technologies will affect productivity and jobs. Warsh has repeatedly said he expects AI to bring about fundamental changes to the U.S. economy. To oversee that task force, Warsh has turned to executives from firms developing AI, including Marc Andreessen, a major investor in crypto firms and AI technology. Asha Sharma, an executive vice president at Microsoft and CEO of its Xbox unit will also co-lead that task force. Charles Jones, an economist at Stanford currently on leave with Anthropic, will act as the third co-chair. Chetty, a Harvard economist, will co-lead a task force on evaluating the data sources used by the Fed. Chetty has broken ground by using huge data sets to track families' economic fortunes over decades and evaluate which areas of the country have seen the most economic mobility. Doug McMillon, the former president and CEO of Walmart, and Kevin Murphy, an economics professor at the University of Chicago, will co-lead the data task force. Also read: Raghuram Rajan's warning to India after Hormuz shock: Build bigger oil reserves, diversify faster A third task force will examine the Fed's balance sheet, which has ballooned in size since the Great Recession in 2008-2009. Raghuram Rajan, a former leader of the Reserve Bank of India, and Harvard economist and former Treasury official Karen Dynan will co-lead the task force, along with Jeremy Stein, a former Fed governor. Greg Mankiw, a top economist in the George W. Bush administration and Thomas Sargent, a Nobel laureate at New York University, will co-lead a task force on inflation frameworks. King, the former Bank of England governor, will be one of the leaders of the task force on communications.

Fed Chair Kevin Warsh names Marc Andreessen, ex-Walmart CEO and others to lead task forces

Venture capitalist Marc Andreessen, economist Raj Chetty and former Bank of England governor Mervyn King are among a slate of names released by the Federal Reserve Thursday that will help develop recommended changes to the central bank's operations. They are among the co-leaders of five different task forces announced by Fed Chair Kevin Warsh last month. The other leaders are a mix of public officials and business leaders. Warsh called for "regime change" at the Fed last year while he was under consideration by the Trump administration to replace former chair Jerome Powell. Warsh has sought to communicate less about the Fed's thinking on interest rates and has said he wants to reduce the central bank's roughly $6.7 trillion in holdings of government bonds. Yet it's not yet clear how transformative the task forces will be. Most of the directors announced Thursday are leading figures in economics and business, rather than longtime Fed critics. Warsh's use of task forces, Fed-watchers say, suggest he wants to persuade his fellow Fed officials of any changes rather than impose them. "The US economy has changed significantly over the last generation, and never more so than right now," Warsh said in a written statement. "Each task force will carefully consider whether policymakers' means and methods, analytical tools and policy approaches can be improved upon." The five task forces will each have three co-leaders and will be supported by Fed staff, the central bank said. One of the task forces will focus on how artificial intelligence and other new technologies will affect productivity and jobs. Warsh has repeatedly said he expects AI to bring about fundamental changes to the US economy. To oversee that task force, Warsh has turned to executives from firms developing AI, including Marc Andreessen, a major investor in crypto firms and AI technology. Asha Sharma, an executive vice president at Microsoft and CEO of its Xbox unit will also co-lead that task force. Charles Jones, an economist at Stanford currently on leave with Anthropic, will act as the third co-chair. Chetty, a Harvard economist, will co-lead a task force on evaluating the data sources used by the Fed. Chetty has broken ground by using huge data sets to track families' economic fortunes over decades and evaluate which areas of the country have seen the most economic mobility. Doug McMillon, the former president and CEO of Walmart, and Kevin Murphy, an economics professor at the University of Chicago, will co-lead the data task force. A third task force will examine the Fed's balance sheet, which has ballooned in size since the Great Recession in 2008-2009. Raghuram Rajan, a former leader of the Reserve Bank of India, and Harvard economist and former Treasury official Karen Dynan will co-lead the task force, along with Jeremy Stein, a former Fed governor. Greg Mankiw, a top economist in the George W. Bush administration and Thomas Sargent, a Nobel laureate at New York University, will co-lead a task force on inflation frameworks. King, the former Bank of England governor, will be one of the leaders of the task force on communications.