The Federal Reserve operates under a "dual mandate" from Congress to promote maximum employment and stable prices (low inflation). As unemployment rises, the Fed will lower interest rates to stimulate investment (increase employment opportunities).
If AI is the cause, it will only stimulate investment in more AI and accelerate the layoffs though. And because they don't have other tools, looks like this is exactly what they are going to do. Investment tends to concentrate massively at the festest-growing trend which this time is just replacing workers with AI.
Which will deepen the hole, until we crest over the AI peak of inflated expectations, bottom out in the trough of disillusionment, and start creeping up the slope of enlightenment. The next 12 months should be worsening unemployment, more rate cuts, higher AI stock prices. Once we bottom out in disillusionment (or companies run out of AI capital), the stock will plummet again, AI companies will die off, unemployment reduces, and rates return to previous levels.
That's the "exists-in-a-vacuum" picture anyway. Stimulus, tariffs, a new war, or some other bullshit will change the results.
That really just feels like they're operating with the mandate to keep the cost of labor low, and the main way to do that is by not paying people enough.
vladimirralev|5 months ago
0xbadcafebee|5 months ago
That's the "exists-in-a-vacuum" picture anyway. Stimulus, tariffs, a new war, or some other bullshit will change the results.
lenerdenator|5 months ago
algorithmmonkey|5 months ago