Fed’s Williams Says AI Won’t Cause Long-Term Job Losses as Colleagues Flag Inflation Risks

New York Federal Reserve President John Williams expressed confidence that artificial intelligence will not lead to long-term structural unemployment, speaking at a central bankers’ conference in Reykjavik that ended on May 29, 2026. “I’m not a believer that we’re going to have long-term structural unemployment,” Williams said, sparking laughter by adding that demand for macro economists will remain vibrant. His optimistic view contrasted with warnings from other Fed officials. St. Louis Fed President Alberto Musalem cautioned that “the demand pressures associated with the AI boom are very real,” citing data center construction, electricity and memory chip demand, and soaring AI company share prices that are fueling consumer spending. Kansas City Fed President Jeffrey Schmid observed that headcount declines across industries appear independent of AI adoption, suggesting broader hiring weakness. Bank of England Governor Andrew Bailey separately revealed the BOE is using large language models to predict market reactions to meeting minutes. The debate underscores how AI has become a central policy question alongside a global energy shock and elevated bond yields.