Walsh emphasized that the Federal Reserve has clearly committed to achieving price stability, opposes making early predictions about interest rate meeting outcomes, and does not advocate disclosing potential policy actions for the remaining meetings in 2026 in advance.

Written by: Zhu Xueying, Wall Street Insights

On October 16 local time, Federal Reserve Chairman Kevin Walsh held a fireside chat with IMF President Georgieva during the 2026 annual meeting of the International Monetary Fund (IMF) and World Bank Group in Bangkok, Thailand, discussing issues such as artificial intelligence, monetary policy, global inflation, and financial stability.

AI is the most far-reaching economic transformation of my life

Walsh stated that artificial intelligence is the most impactful economic transformation of his life. In the United States, people now refer to AI as "SI."

He believes that the impact of artificial intelligence on the demand side of the economy will become apparent before the supply side shocks are observed. AI will change the real economy, but there remains uncertainty about its short-term effects on employment.

Additionally, artificial intelligence will help central banks enhance their confidence in economic data and monetary policy judgments.

The October and December meetings are crucial

Walsh indicated that the remaining interest rate meetings in 2026 will be key moments for forming clear policy judgments, especially the meetings in October and December.

He emphasized that the Federal Reserve has clearly committed to achieving price stability, opposes making early predictions about interest rate meeting outcomes, and does not advocate disclosing potential policy actions for the remaining meetings in 2026 in advance.

The Productivity and Employment Working Group will hold a hearing on November 16

Walsh announced that the Federal Reserve's Productivity and Employment Working Group will hold an on-site hearing in the San Francisco Bay Area on November 16, studying many issues, including the economic impact of artificial intelligence.

In June of this year, Walsh established five working groups composed of external experts to study key areas of monetary policy formulation, which are expected to submit recommendations to the Federal Reserve by the end of this year.

Walsh also pointed out that the Federal Reserve working group is tasked with creating new intellectual capital and assisting the Federal Open Market Committee (FOMC) in decision-making.

Global synchronized tightening of monetary policy, no "free riders"

Walsh noted that inflation is not an issue unique to the United States. He learned from central bank peers around the world that countries are determined to achieve price stability.

He stated that most regions globally are synchronously tightening monetary policy, which means no country can "free ride."

Moreover, the Federal Reserve's monetary policy will have spillover effects on other regions of the world, but the policies of other countries will also, in turn, affect the United States.