The rapid rise of artificial intelligence may supercharge the economic growth of the U.S., but Jefferies’ chief market strategist David Zervos says it could also trigger a wave of job losses that the Federal Reserve is unprepared to handle.
Fed Faces AI Dilemma: Strong Growth But Rising Unemployment
Speaking on CNBC’s Fast Money this week, Zervos warned that the Fed’s traditional focus on inflation could blind it to the risks AI poses to employment.
“We could actually have a pretty strong growth economy. Your AI story… [is] something really pretty spectacular. But the job growth side of it is not nearly as comfortable as you would like it to be,” he said.
Zervos, a longtime market bull and potential candidate to succeed Fed Chair Jerome Powell, painted a troubling scenario.
“Imagine a world, maybe where we’re [the economy] growing at three and a half or four …