"For the first time ever, we are replacing people with machines I think we are going to be replacing people with machines, or people with artificial intelligence, Shellady said. We're not replacing people with different skills with people that have, say, old skills. He continued, I'm not quite sure that the Fed cutting interest rates is even going to help the unemployment rate. I don't think that's going to be the case."
"Last week, the Fed announced its third interest rate cut of the year, cutting the federal funds rate by 25 basis points to a new range between 3.5% to 3.75%. Powell noted inflation has eased significantly from its highs in mid-2022, during the second year of President Joe Biden's term, but remains somewhat elevated relative to our 2% longer-run goal."
U.S. unemployment rose to 4.6% in November. Payrolls increased by 64,000 jobs, exceeding forecasts of about 50,000. Artificial intelligence is taking many jobs and is expected to continue displacing workers across different skill levels. Structural job displacement from AI could limit the effectiveness of Federal Reserve interest rate cuts in reducing unemployment. The federal funds rate was cut by 25 basis points to a 3.5%–3.75% range, marking the third cut this year. Inflation has eased since mid-2022 but remains above the 2% longer-run goal, with total PCE up 2.8% over the 12 months ending September; tariffs raised prices for some goods.
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