Warsh taps Andreessen to lead Fed AI task force of 15 experts

The Federal Reserve is building formal machinery to treat artificial intelligence as an input to the price of money, and the five task forces Chairman Kevin Warsh announced Thursday carry a mandate that could reshape how the central bank sets interest rates.

"The productivity and jobs group is charged with assessing the economic impact of new general-purpose technologies, including artificial intelligence, to inform the Federal Reserve's policy judgments," Warsh said in a statement announcing the 15 outside experts selected for the panels.

The productivity and jobs task force is co-led by Marc Andreessen, the Netscape co-founder and venture capitalist whose firm has billions riding on AI outcomes. He is joined by Charles I. Jones, a Stanford economist whose career work centers on technology-driven growth theory and who is currently on leave at Anthropic, and Asha Sharma, the Xbox chief executive who previously ran Microsoft's CoreAI product group. The composition — three people who have each publicly argued AI is economically transformative — telegraphs the direction of the group's eventual recommendations before its first meeting.

The other four task forces cover communications, balance sheet policy, data, and inflation frameworks. Mervyn King, the former Bank of England governor, co-leads communications. Raghuram Rajan, who ran India's central bank, joins former Fed governor Jeremy Stein on the balance sheet panel. Greg Mankiw and Nobel laureate Thomas Sargent take the inflation framework. All groups have been asked to deliver recommendations by year-end.

Warsh has been explicit about the precedent he intends to follow. He reads AI as an internet-style productivity boom, the kind the American economy last experienced in the 1990s. In 1996 and 1997, with unemployment falling and conventional wisdom demanding preemptive rate increases, Alan Greenspan held rates steady after detecting productivity gains that had not yet surfaced in official statistics. Productivity growth accelerated from roughly 1.5% in the early 1990s to between 2.5% and 3% from 1996 through 2004, inflation stayed contained, and the expansion ran years past the point where traditional models said it should have ended.

The Greenspan episode is the operating theory of Warsh's chairmanship. A central bank that recognizes a productivity boom early can let the economy run. A central bank that misses one risks strangling the expansion by fighting inflation that was never coming. The task force is the institutional version of Greenspan's scattered corporate reports — a body designed to detect the productivity shift faster than official statistics will show it.

The implications for investors extend beyond the technology sector. If the Fed formally credits AI-driven productivity as disinflationary, it will read the same economic data differently: strong growth becomes evidence the technology is working rather than evidence of overheating. That shift would allow the central bank to tolerate expansions the old playbook would have cut short, reaching every asset discounted against the policy rate — including the large majority of stocks that have nothing to do with AI.

The current fed funds rate stands at 4.25% to 4.50%, unchanged since the 25-basis-point cut in December 2025. OIS markets currently price roughly 50 basis points of additional easing through the end of 2026, though expectations have shifted repeatedly as the economic outlook has evolved. Warsh testifies before the House Financial Services Committee and the Senate Banking Committee this week, where lawmakers are expected to press him on the task forces' scope and how their recommendations will be weighted in policy decisions.

The last time the Fed formally integrated a new technology framework into its policy apparatus was never. The closest parallel is Greenspan's 1996 "irrational exuberance" speech, which signaled the chairman was thinking about asset valuations in a way the Fed's models did not capture. That speech preceded a period of extraordinary equity returns as the productivity boom validated the expansion. If the task force concludes that AI-driven productivity gains are real and disinflationary, rates could sit lower than the old playbook allowed — and every valuation in the market gets measured against that lower bar.

This article is for informational purposes only and does not constitute investment advice.