👁 The Fed (maybe) sees a glimpse of the Age of AI

And give technological progress a thankful shout-out on before the big meal of Thursday

The Federal Reserve, Congressional Budget Office, and Wall Street megabanks are a lot different than artificial-intelligence company founders, Silicon Valley venture capitalists, and e/acc social media accounts. They’re a cautious group by nature. Such large, establishment institutions are unlikely ever to offer the most bullish forecasts about the potential impact of recent advances in generative AI (as I recently wrote in “The AI Paradox: When will artificial intelligence boost US economic growth?”).

For example: Check out the language used in the excellent new report from the National Academy of Sciences, “Artificial Intelligence and the Future of Work” when discussing the possible growth impact of GenAI: “The substantial and ongoing improvements in AI’s capabilities, combined with its broad applicability to a large fraction of the cognitive tasks in the economy and its ability to spur complementary innovations, offer the promise of significant improvements in productivity.”

So not “Singularity soon!” or speculative riffing off prediction market forecasts of human-level AI by decade’s end.

Which makes sense. Prediction is difficult, especially about the future — and especially about a new, fast-evolving technology. What’s more, it’s tricky searching through government statistics for the productivity impact of new technology given the tendency of large data revisions over time. One of the most interesting tensions of the 1990s productivity boom was how the Fed grappled with reconciling business leaders' mounting claims of an emerging digital revolution versus the more ambiguous story told by existing economic metrics.

Given that history, I’m always searching — and sometimes squinting — for any sign of exceptional or increasing AI optimism from the megabanks and Washington, especially the Fed. A great catch, then, by the JPMorgan economics team when analyzing the just-released minutes from the early November meeting of the Federal Open Market Committee: