Fed must dig deep on AI impact to make right rate calls ahead, Daly says

Feb 17 (Reuters) – The Federal Reserve must dig deep on the data to assess ‌whether artificial intelligence is boosting productivity growth ‌and enabling faster economic growth without igniting inflation or requiring ​the Fed to tap the brakes with tighter policy, San Francisco Fed President Mary Daly said on Tuesday.

The Trump administration says that’s already happening, ‌and some economists ⁠say that rising investment into AI will boost productivity growth further, creating ⁠an economy that, as in the 1990s with the adoption of computers and software, could grow ​faster than ​before even as ​inflation remained tame.

So far, ‌Daly said in remarks prepared for delivery to an event at San Jose State University hosted by the Silicon Valley Leadership Group, “most macro-studies of productivity growth find limited evidence of a ‌significant AI effect.” That could ​be because it is still ​too soon to ​see the results of the ‌improvements from investments by individual ​companies in ​some corners of industry.

Or, she said, “it could also be that we are simply not there ​yet,” and ‌it takes a lot more time for ​economy-wide transformations to occur.

(Reporting by Ann Saphir; ​Editing by Chizu Nomiyama )