Warsh Misreads Greenspan's 1996 Rate Call on AI, Opinion Says

1 articles · Updated · The New York Times · Jun 24

Kevin Warsh, now Fed chair, is criticized for treating Alan Greenspan’s 1996 decision to hold rates steady as a template for handling today’s AI-driven economy.
The argument is that Greenspan did not simply bet on new technology: in 1996 he spent months testing whether the computer boom was lifting productivity enough to contain inflation.
That distinction matters because Warsh invoked the episode while seeking Trump’s backing for the job, suggesting AI could justify avoiding rate increases before comparable evidence is clear.
Greenspan, who died this week at 100, is presented as successful not because he moved early on intuition, but because he grounded a risky policy call in detailed data and historical parallels.