Kevin Warsh taps Marc Andreessen and tech leaders to assess AI's economic impact at the Fed

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.

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.