Fed Must Scrutinize AI's Productivity Impact Before Adjusting Rates: Daly

• San Francisco Fed President Mary Daly emphasizes the need for deeper data analysis on AI's productivity impact before policy moves.
• Macroeconomic studies currently show limited evidence of a significant economy-wide productivity boost from AI.
• Daly cautions that it may be too early to see AI's full impact in aggregate data, comparing it to past broad-based economic transformations.
• The Fed's challenge is distinguishing between inflationary pressures and genuine productivity gains from stronger growth signals.
• Policymakers must examine sector-level trends and engage with businesses to assess AI's role, similar to Alan Greenspan's approach in the 1990s.