Artificial intelligence will fundamentally change the conduct of monetary policy by global financial regulators, although its impact on macroeconomic indicators is still unclear, US Federal Reserve Chairman Kevin Warsh said on Friday.

Warsh called the emergence of AI the most significant change for the US and global economy of a lifetime. AI tools will change the decision-making process of central banks, allowing them to process large arrays of information faster and distinguish real economic signals from lagging or distorted data more accurately, he predicted.

"Not so long from now… we will have access at the fingertips of central banks to all the information in the world, and we will be able to use new analytical tools to distill that data… I think it is going to fundamentally change the conduct of monetary policy," Warsh said at the annual meeting of the International Monetary Fund and the World Bank Group in Bangkok.

Commenting on the impact of AI on macroeconomics, Warsh said that in the short term, the technology primarily affected demand, while the positive effect for supply and productivity would manifest later.

"If you are a central banker and you are in the business of trying to ensure stable prices and full employment, you have got to recognize that this is a shock, but it is a positive supply shock in the medium term," the official said.

Warsh acknowledged uncertainty regarding the consequences of the spread of AI for the labor market, arguing that it is not known yet how AI will impact employment in the next 12 or 18 months.

The widespread use of AI will increase productivity and prosperity in the long run, but the transition to this state will likely be very uneven, Warsh said. It is also still unclear how the market for new technologies will be structured and who will ultimately receive the main economic benefit from them, he added.

@Sputnik