Fed Chair Kevin Warsh is convening a summit on whether AI drives inflation up or pushes it down — but he's simultaneously reducing how often the central bank votes on interest rates and clamping down on what the public knows about where policy is headed, leaving working Americans to guess at their borrowing costs while tech monopolies reshape the economy around them.
The stakes are direct. If AI spending keeps inflation hot, the Fed keeps rates high, borrowing stays expensive, and paychecks keep shrinking. If AI eventually delivers productivity gains, rates could fall. Either way, Warsh is making it harder to know which way the wind blows — just as the same tech giants whose data-center spending may be fueling inflation are outbidding Bitcoin miners for the electricity both industries need to function.
Warsh will host a public forum November 16 in San Francisco, bringing together technology executives, economists, and employers to examine how AI is reshaping the economy, according to Decrypt. Warsh has argued AI could help companies produce more at lower costs, easing inflation without requiring the Fed to keep borrowing expensive. But his own colleagues aren't so sure. Fed Governor Lisa Cook warned in September that AI investment was adding inflationary pressure and delaying the central bank's return to its 2 percent inflation target. Fed Governor Michael Barr warned Thursday of possible "serious short-term disruptions" as businesses replace human tasks with AI systems.
The data-center boom tells the story. Building AI infrastructure requires enormous quantities of electricity, computer chips, construction materials, and skilled workers. When tech companies compete for those limited resources, prices rise. That's not a productivity miracle — that's an inflationary pressure machine, and the monopolies driving it are the same ones Warsh is now courting for answers.
Meanwhile, Warsh is tightening the flow of information out of the Fed. Under a revised calendar released Thursday, the Fed will meet eight times in 2027, but one session will be reserved for "broad monetary policy strategy" rather than a rate decision. By 2028, only six meetings a year will include a policy vote, The New York Times reported. Next month's meeting wraps up a day before fresh November inflation numbers come out — meaning officials will vote without knowing whether price pressures accelerated or eased.
Former Fed insiders are sounding alarms. William English, a former director of the Fed's monetary affairs division now at Yale, told The Times that Warsh's tight-lipped approach undercuts public understanding. "If you had a committee that was meeting really often, then you don't necessarily have to communicate as much, because you're going to be taking another step or not taking another step very soon," English said. "The longer the gap, the more communication does matter." Donald Kohn, who served as Fed vice chair while Warsh was a governor, argued that clearer signals could help the central bank avoid disruptive emergency sessions. Esther George, who led the Kansas City Fed from 2011 to 2023, put it plainly: "The decision process is more important than the timing. And this committee is struggling a bit with how to communicate what exactly they mean."
Bitcoin is already getting squeezed from both sides. The cryptocurrency dropped below $69,000 Friday as stronger-than-expected inflation figures fueled concerns about another rate hike, Decrypt reported. And the AI boom is hitting miners directly — both AI data centers and Bitcoin mining operations need large amounts of electricity. Hyperscale Data shut down mining at its Michigan facility in September to accommodate an AI customer under a deal potentially worth more than $1.2 billion. When the same tech monopolies driving inflation can outbid Bitcoin miners for power, the message is clear: the system isn't built for ordinary Americans trying to escape fiat debasement.
Warsh acknowledged in August that AI represents "a new variable" for monetary policy. The open question is whether the Fed chair asking the right questions about tech and inflation will also give the public straight answers about where his own institution is headed — or whether Americans will keep reading tea leaves while the insiders write the rules.
