**[Walsh Pushes AI to Reshape the Federal Reserve, But Short-Term Inflation Control Still Relies on Traditional Interest Rate Tools]** BlockBeats News, August 10: Federal Reserve Chairman Kevin Walsh is advocating for the use of artificial intelligence (AI) to reshape the central bank's economic analysis and policy decision-making system. However, with inflationary pressures persisting, the Federal Reserve will still need to rely on traditional interest rate tools in the short term to stabilize prices. According to reports, Walsh aims to reduce the Fed's dependence on lagging economic data and traditional surveys by leveraging real-time data provided by retailers, banks, and other institutions to more quickly capture changes in economic growth and inflation. He previously developed AI models named "Milton" and "Tobin" to analyze modern economic issues. Since taking office, Walsh has pushed for expanded AI applications within the Federal Reserve, with dozens of employees currently exploring the role of AI in data analysis and economic forecasting through a testing environment. Additionally, Walsh is considering adjustments to the Fed's operational mechanisms, including reducing the frequency of annual monetary policy meetings to improve decision-making efficiency. However, his reforms have sparked mixed reactions in the market. Following his press conference on July 29, U.S. stock and bond markets experienced volatility, with some investors questioning his stance on curbing inflation. Analysts believe that while AI may enhance the Fed's long-term decision-making capabilities, the central bank's policy framework is unlikely to undergo fundamental changes in the short term due to technological transformation. The market expects that under Walsh's leadership, the Federal Reserve will continue advancing AI and institutional reforms, but interest rate policy will remain the primary tool for regulation until inflation returns to the 2% target. [Original Link]