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AI, the Economy, and Financial Stability

Philip N. Jefferson
Vice Chair, Federal Reserve Board
Board of Governors of the Federal Reserve System, February 22, 2024

The views expressed here are my own and are not necessarily those of my colleagues on the Federal Reserve Board or the Federal Open Market Committee.

Roadmap of Talk

AI and the dual mandate
AI and financial stability
Comparing recent trends with the late 1990s
Discussion

AI Adoption in the Economy

Figure 1: Share of Adults (Ages 18-64) Using Generative AI

Percent

Date	Overall	Nonwork	Work
2024-08-24	45	36	33
2024-11-24	46	39	31
2025-02-25	48	42	33
2025-05-25	52	46	35
2025-08-25	55	49	37

Source: Federal Reserve Bank of St. Louis, Real-Time Population Survey; author’s calculations.

Figure 2: Survey of Salient Risks to Financial Stability

	Policy uncertainty	Geopolitical risks	Higher long-term rates	Persistent inflation	Artificial intelligence	Asset price declines
Fall 2025	61% of contacts surveyed	48% of contacts surveyed	43% of contacts surveyed	43% of contacts surveyed	30% of contacts surveyed	30% of contacts surveyed
Spring 2025	50% of contacts surveyed	23% of contacts surveyed	9% of contacts surveyed	41% of contacts surveyed	9% of contacts surveyed	36% of contacts surveyed

Source: Federal Reserve Board, November 2025 Financial Stability Report.

Contrasts with the Late 1990s

Currently...

Firms identified with AI generally have well-established and growing earnings streams
Price-to-earnings ratios of AI-related firms are below peak 1990s ratios
Relative to the number of dot-com firms in the late 1990s, fewer publicly traded firms are considered AI-focused enterprises

Conclusion

"Ensuring that the AI revolution unfolds within the context of a stable financial system is not just desirable—it is also imperative for achieving our dual-mandate objectives."