Philip N Jefferson: AI, the economy, and financial stability
Speech by Mr Philip N Jefferson, Vice Chair of the Board of Governors of the Federal Reserve System, at the 2025 Federal Reserve Bank of Cleveland Financial Stability Conference, Cleveland, Ohio, 21 November 2025.
The views expressed in this speech are those of the speaker and not the view of the BIS.
Thank you, Director Knotek, for the kind introduction. It is a pleasure to be with you today and to be back in Cleveland and the beautiful Fourth district. It is always a pleasure to visit the Federal Reserve Bank of Cleveland-and all the Reserve Banks. The hard work and dedication of Reserve Bank staff, leadership, and directors help ensure the economic well-being of communities across the country, including in Ohio, Pennsylvania, West Virginia, and Kentucky. One of the many important roles the Reserve Banks have is to be the connection between policymakers and families, workers, and businesses in every corner of the country. That allows us to be well-informed and to make the best decisions for the benefit of all Americans. I thank everyone here at the Cleveland Fed for their service.
As we are gathered to discuss financial stability in an era of rapid economic and technological transformation, I would like to turn our attention to what many see as a significant catalyst of change: artificial intelligence (AI). Today, I will talk about how I approach thinking about AI. First, I will build on remarks I gave earlier this month and discuss how I see AI affecting the economy through the lens of the dual mandate given to the Federal Reserve by Congress to pursue maximum employment and price stability.2 Next, I will discuss AI in the context of financial stability because a stable and resilient financial system is, of course, critical to achieve that dual mandate. I will do so by highlighting some of the findings in our recently released Financial Stability Report (FSR). And finally, I will discuss how the current period compares with another recent period of notable technological change-the late 1990s. Afterwards, I would be happy to answer your questions.