Fed Chair Warsh: AI is the most profound economic transformation in my lifetime, October and December FOMC meetings are crucial

Federal Reserve Chair Kevin Warsh held a fireside chat with IMF Managing Director Kristalina Georgieva in Bangkok, Thailand, during the IMF and World Bank annual meetings. During the conversation, he noted that artificial intelligence is the most far-reaching economic transformation of his lifetime. At the same time, he emphasized that the Fed's two remaining rate meetings this year—in October and December—will be key moments for making a clear policy judgment.<br /> <br /> Warsh also mentioned that since the September rate hike, the global economic trajectory has been "broadly in line" with the Fed's expectations. This remark suggests a rising likelihood that rates will be held steady at the October 28 meeting. Following his remarks, the dollar fell 0.1% against a basket of currencies, S&P 500 futures rose 0.3%, and market-implied odds of a Fed rate hike in October quickly dropped from about 27% to about 15%.<br /> <br /> Charu Chanana, Chief Investment Strategist at Saxo Markets