The Fed wants AI investor Marc Andreessen to help figure out if AI can tame inflation

Jul 10, 2026

Fed Chair Kevin Warsh has appointed venture capitalist Marc Andreessen to advise the Federal Reserve on how AI could reshape the economy.

According to the Washington Post, Andreessen is one of three co-chairs of a working group called "Productivity and Jobs." It's one of five working groups whose leadership and goals the Fed announced on Thursday, July 9, 2026. The group is tasked with studying the effects of new foundational technologies, including AI.

Alongside Andreessen, the group is co-chaired by Stanford economist Charles I. Jones, currently on leave at AI company Anthropic, and Microsoft executive Asha Sharma. Andreessen also sits on Trump's President's Council of Advisors on Science and Technology.

Why AI could shape interest rate decisions

The working group matters for monetary policy because Warsh believes AI can hold down price growth. In a Wall Street Journal op-ed from November 2025, he wrote that AI would be a "significant disinflationary force." His argument: widespread AI adoption could boost productivity and expand the economy's output potential, easing price pressure and giving the Fed room to cut rates.

That chain of logic isn't airtight, though. Higher expected incomes and stronger investment demand could also push up the neutral interest rate. Warsh himself admitted, according to Reuters, that the Fed can't yet reliably gauge the productivity effect. He draws parallels to former Fed Chair Alan Greenspan, who from mid-1996 through late 1998 largely resisted calls for higher rates, raising the federal funds rate only once, slightly, in March 1997.

Not everyone agrees: Some Fed officials and economists warn that building out AI infrastructure will first drive up demand for capital, chips, energy, and raw materials, creating price pressure before broader productivity gains kick in. Deutsche Bank estimates, according to Reuters, that cumulative AI data center investment could top four trillion dollars by 2030. The effect is already visible in memory chips.

On the energy side, Fed officials warn about inflationary risks from potential grid bottlenecks and supply constraints. Fed Governor Michael S. Barr said in a February 17, 2026 speech: "I expect that the AI boom is unlikely to be a reason for lowering policy rates." Over the long term, however, even Barr expects positive productivity effects.

The appointment also raises conflict-of-interest questions, since Andreessen's firm Andreessen Horowitz has invested heavily in AI companies.