Federal Reserve Vice Chair Philip Jefferson said that artificial intelligence-related disruptions in the labor market may require measures beyond monetary policy. He argued that monetary policy can cushion short-term employment fluctuations but may not be sufficient to address the long-term structural changes driven by artificial intelligence. The U.S. unemployment rate stands at 4.1%, while the federal-funds target range is 3.75% to 4.00%. Jefferson pointed to labor, education and fiscal policies as possible responses, a position that could lead the Fed to adopt a more cautious stance on future rate hikes.
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