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Investing.com -- The speed at which investors respond to specific sentences in central bankers' speeches and in their policy statements is being accelerated by artificial intelligence (AI), according to Federal Reserve Vice Chair Philip Jefferson. However, it remains uncertain whether this increased pace is enhancing or obstructing the effective transmission of monetary policy.

Jefferson, speaking on Friday, clarified that AI does not seem to be altering the way policymakers communicate at present. However, research indicates that it has influenced the speed at which policy information is incorporated into asset prices. He made these remarks at a conference at the San Francisco Fed, without providing any insights into his views on the future of monetary policy or the U.S. economy.

The Federal Reserve Vice Chair highlighted the need for further research. This would help determine whether the faster speed is enabling monetary policy to be transmitted more quickly through the economy. On the other hand, there are concerns that it might encourage investors to prioritize speed over accuracy. This could potentially decrease the long-term informativeness of asset prices, which could adversely impact the transmission of monetary policy.

Jefferson also emphasized that it's not just investors who pay attention to monetary policy announcements. Households too respond to these pronouncements. Policymakers, he stated, should strive for maximum clarity in their communication to prevent any increase in uncertainty.

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