Kevin Warsh says global economy has shown resilience

US Federal Reserve chair Kevin Warsh said on Friday that the global economy had shown more resilience than he expected as central banks deal with inflation and higher bond yields.

Speaking at an event hosted by IMF chief Kristalina Georgieva during the IMF-World Bank Annual Meetings in Bangkok, Warsh said “almost everywhere” in the global economy was showing resilience he was not sure he would have predicted five or six months earlier.

Warsh did not say what the Federal Reserve might do at its October policy meeting. He said the world had broadly conformed to the outlook the Fed reached at its September meeting.

Warsh said many advanced economies faced common challenges and that he had heard resolve from other central bankers to deliver price stability. He described recent rate rises across major economies as a synchronous tightening of monetary policy.

Much of the discussion focused on artificial intelligence. Warsh called AI the “most consequential change” to the global economy he had seen, saying it could drive prices higher in the short term through demand effects but could bring a positive supply-side shock over the longer term.

He said the path ahead for AI would probably be “bumpy” because of uncertainty over the technology and the market structures that may develop around it.