Even an institution as steeped in tradition as the Federal Reserve is exploring use cases for gen AI. 

“Generative AI has all the earmarks of emerging technology that could be very important in our economy and in our society,” Fed Chair Jerome Powell said during a panel at the Greater Providence Chamber of Commerce in Warwick, R.I., on Sept. 23. “What we’re seeing is companies and institutions — like the Fed, for that matter — are starting to experiment with what they can [do with] this new set of tools, [and how they] can be used in our operations.”

According to a July 17 memo, the Fed is exploring gen AI for: 

• Policy workflow enhancements: Gen AI can aggregate and analyze large volumes of data, summarize research, produce drafts of reports and flagging anomalies for closer review; 

• Economic trend modeling;  

• Stock market analysis; 

• Earnings calls search tool; 

• Financial news analysis; 

• Cybersecurity monitoring; and 

• Consumer complaints exploration. 

The Fed expects the process is “going to be a period of experimentation over a period of years,” Powell said, adding that the Fed is taking a “wait-and-see approach” on how the tech can make its operations more efficient. 

Impact on labor market 

As it evolves, there’s a lot of fear that technological innovation will eliminate jobs, Powell said. “What has tended to happen in history over time is it just raises productivity and creates new jobs to replace the old jobs.” 

The Fed’s labor economists are evaluating the impact of AI tech on the labor market, but it is “too early to tell” what its real impact will be, Powell said. 

The Federal Reserve did not respond to multiple requests for comment. 

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