Mary Daly on AI productivity
From SF Fed's Daly on the Economic Impact of AI · · Bloomberg Live
“If it is a is transformative, as some of the other technologies have been that we call transformative in our history. Then you absolutely start seeing productivity gains. And that means the pie grows faster and we can things can fall in in value. And falling prices and inflation can it can be deflationary. And the timing is really what matters. So you know you talked about the five and ten year landscape. We're talking about the you know 12 month landscape. When we're thinking about policy decisions we have to think about today. And then we're thinking about the five and ten of where we're heading.”
On , Mary Daly, President at Federal Reserve Bank of San Francisco, spoke about AI productivity during SF Fed's Daly on the Economic Impact of AI on Bloomberg Live.
About Mary Daly
Mary Daly, President of the Federal Reserve Bank of San Francisco, said during several appearances in April through June 2026 that while there is "tremendous investment" in artificial intelligence by businesses, widespread productivity gains from AI are not yet visible in economic data. She described the next year as "the big test" for whether those gains will materialize, adding that firms are still in the early stages of learning the technology and changing their business processes. Daly drew a comparison to the adoption of electrification, noting that sustained productivity gains historically required business process change rather than simply adding new technology to existing operations. She said she is not seeing evidence of financial stability concerns from rising markets or from data center financing, stating that companies are investing "a lot of their own resources" into those projects. On monetary policy, Daly said policy is currently "in a good place" and that the right decision from the May 2026 Federal Open Market Committee meeting was to hold the rate steady. She said providing more specific forward guidance about future rate moves "could be misguided" because of economic uncertainty, and she emphasized the need to balance the risks of overreacting and underreacting to incoming data. Daly stated that inflation remains her "number one priority," pointing to elevated energy and food prices as key drivers, and she said she does not see confusion among the public about the Fed's commitment to price stability. She also expressed that she looks forward to the "real discussions" that incoming FOMC Chair Kevin Warsh has said he wants to have.