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

Federal Reserve officials are intensifying their scrutiny of artificial intelligence's potential economic impact, signaling a nuanced approach to monetary policy that could have profound implications for precious metals markets. San Francisco Fed President Mary Daly's latest remarks reveal a methodical investigation into AI's transformative potential, highlighting the delicate balance between technological innovation and economic stability.

While some economists suggest AI could drive productivity growth similar to the computer revolution of the 1990s, the technology's broader market impact remains uncertain. Daly emphasized that current macro-studies have found limited evidence of significant AI effects, indicating the need for deeper, more granular analysis of technological transformation.

The potential implications for precious metals investors are substantial. If AI drives genuine productivity improvements without triggering inflationary pressures, it could create a more stable economic environment. The Fed remains cautious about prematurely adjusting monetary policy, suggesting a measured approach to integrating technological advances into economic forecasting.

Daly's commentary underscores the complexity of assessing technological disruption. She noted that economy-wide transformations often require significant time to manifest, cautioning against hasty conclusions about AI's immediate economic impact. This measured perspective suggests investors should expect a gradual, carefully monitored integration of AI into economic models.

For precious metals markets, this measured approach implies potential stability. While AI could drive industrial demand for silver in technological applications, the Federal Reserve's careful analysis suggests a measured, predictive stance rather than reactive policy shifts. Investors should monitor ongoing research and Fed communications for nuanced insights into AI's economic trajectory.