Economist: Wosh's optimistic attitude toward artificial intelligence may not serve as a reason to cut interest rates

ME News Report, April 20 (UTC+8), Federal Reserve nominee Kevin Woorh believes that the upcoming productivity growth could give the Fed room to cut interest rates, provided that higher productivity can lead to low-inflation economic growth. However, economist Ed Yardeni also expects the economy to benefit from technological advances this decade, but he disagrees that this outcome would justify lowering rates. Yardeni wrote: “While we share Woorh’s optimistic outlook on productivity, we have fundamentally different views on what this means for monetary policy.” Yardeni believes that faster growth will raise the natural rate, R*, which is the rate that neither stimulates nor restrains the economy. He wrote: “If the Fed lowers the federal funds rate below R*, the risk is that it will fuel financial speculation and instability.” (Source: Jin10)