Cybersecurity experts have expressed concern<\/a> about Mythos\u2019 ability to<\/a> \u201cexecute multi-stage attacks on vulnerable networks and discover and exploit vulnerabilities autonomously.\u201d According to reporting by Bloomberg<\/a>, the hastily organized meeting was a \u201csign that regulators consider the possibility of a new breed of cyber attacks as one of the biggest risks facing the financial industry.\u201d<\/p>\n Ricketts asked Warsh, who served on the Federal Reserve Board of Governors from 2006 to 2011, what he would do to modernize the Fed\u2019s internal risk assessments and scenario-planning exercises \u201cto ensure that we can anticipate and defend against the type of emerging risks that potentially models like Mythos could present if used in the wrong hands.\u201d<\/p>\n Warsh said the short answer is that \u201cthe pace of change in these technologies is accelerating. AI, which I think of really as American ingenuity, gives America a huge head start relative to our competitors around the world. But it\u2019s not without real risks and real challenges, and a forward-looking, reform-oriented central bank needs to be on the front end of it.\u201d<\/p>\n The exchange between Ricketts and Warsh wasn\u2019t the only time AI came up during Tuesday\u2019s hearing, which focused largely on the Fed\u2019s independence and whether Warsh was nominated simply to do the president\u2019s bidding<\/a>.\u00a0<\/p>\n Sen. John Kennedy, R-La., briefly pressed Warsh on the Fed nominee\u2019s views that AI\u2019s productivity increases would stabilize prices<\/a> and \u201ctherefore inflation isn\u2019t a problem, therefore rates can be cut.\u201d Warsh replied that that\u2019s not how he \u201cwould characterize the story of AI,\u201d but Kennedy seemingly wasn\u2019t satisfied.\u00a0<\/p>\n \u201cHere\u2019s my worry: that a lot of this stuff about artificial intelligence making us more productive is a bunch of hype by people who want to sell stock and an IPO. I\u2019d be careful there,\u201d the Louisiana Republican said.<\/p>\n During a hearing before the same committee nearly a year ago, Powell told senators that although the impact AI was having on the U.S. economy at the time was \u201cprobably not great<\/a>,\u201d he expected the technology to bring about \u201csignificant changes\u201d to the labor market in the years ahead.<\/p>\n In a back-and-forth with Sen. Bernie Moreno, R-Ohio, Warsh struck what seemed to be a sunnier tone about AI\u2019s potential for productivity gains \u2014 mixed with uncertainty about the technology\u2019s long-term workforce effects. He said he is \u201cmore confident that there will be improved output\u201d than he is \u201ccertain about when the effects of that would be on the labor market.\u201d\u00a0<\/p>\n \u201cThe labor force, the structure of the labor market, changes,\u201d Warsh said. \u201cThe jobs that will be created two or three years from now, some of which are unimaginable to us today. But the lag between the improvement and output, and the effect on the labor markets, that\u2019s got to be central to the Fed\u2019s thinking, given the pace of innovation in this cycle.\u201d<\/p>\n
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