Economist Markus Brunnermeier warned that AI agents could outmaneuver policymakers and make markets more erratic.
Global central bankers at the Federal Reserve’s Jackson Hole symposium considered how artificial intelligence could reshape financial markets and complicate monetary policy.
Princeton economist Markus Brunnermeier warned that widespread AI-powered trading could allow machines to anticipate policy decisions, outmaneuver authorities, and make markets less informative and more erratic.
He said central banks could face pressure to rethink transparency and predictability, including the possibility of communicating differently with humans and AI systems. Brunnermeier argued that regulation should prioritize simplicity and robustness.
Boston Fed President Susan Collins said AI and financial innovation offer real opportunities but require policymakers to consider risks, including the potential for increased illicit activity.
The discussion added a market-focused perspective to a debate in which central banks have more often considered AI’s effects on employment, productivity, and inflation.
