What Is Fed Chair Kevin Warsh Sensitive To? BlackRock Executive Has an Answer

After the Federal Reserve held rates at 3.75% to 4% on Wednesday, BlackRock managing director Jeffrey Rosenberg said Fed Chair Kevin Warsh is sensitive to artificial intelligence (AI) and linked tightening financial conditions to it. Rosenberg said the Fed’s June minutes flagged AI-driven demand as an inflation risk, while a blow to AI would be primarily disinflationary and could affect rate-sensitive assets such as Bitcoin. The decision was a 10-2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a hike; September headline consumer prices rose 3.7% year over year and core prices, which exclude food and energy, rose 2.6%.