Federal Reserve to Hold AI Hearing in San Francisco on November 16, Discussing AI's Impact on Inflation and Labor Markets

Precedent & Market Context

The US investment surge is a positive development for the global economy, driven by sound macroeconomic policy and strong microeconomic foundations. However, the fear of Fed rate hikes and the challenges faced by the cryptocurrency industry continue to cast a shadow over the market. The recent case of 82 criminal charges against seven suspects in an alleged armed kidnapping of a crypto exchange owner in Toronto has highlighted the need for companies to prioritize regulatory compliance in the cryptocurrency industry.

KOSPI Rebounds 3%, but Fed Rate Hike Fears Could Cap the Recovery

The KOSPI index's rebound is a partial fix, but it does not address the underlying concerns that have been casting a shadow over the market. Investors should remain cautious about the market's outlook due to lingering fears and doubts about AI's role in trading. The recent surge in investment has highlighted the need for companies to prioritize regulatory compliance in the cryptocurrency industry.

JPMorgan and Goldman Sachs sweeten terms on Volta’s $5 billion AI loan

JPMorgan and Goldman Sachs have revised the terms of a $5 billion loan for Volta Infrastructure Holdings Ltd., offering yields of 11.21-11.75% to attract institutional investors. The revised deal includes a non-call period and rate step-down opportunities tied to Anthropic's creditworthiness. The structure of the deal reflects the risk calculus at play in AI debt markets, with lenders willing to take on more risk in exchange for higher yields.

The Federal Reserve's AI Hearing

The Federal Reserve plans to hold an AI hearing in the San Francisco Bay Area on November 16, 2026. The event involves the Fed's Board of Governors and the Federal Reserve Bank of San Francisco. As of mid-October, the Fed had not laid out a public format, agenda or list of participants.

Fed officials have stepped up their AI commentary considerably. Their focus has centered on three areas: productivity, inflation and labor markets. The San Francisco Fed maintains the EmergingTech Economic Research Network, known as EERN, which studies how emerging technologies such as AI affect the economy.

Mary Daly’s supply shock warning

San Francisco Fed President Mary Daly argued that AI-driven demand could stretch out supply shocks tied to key resources like chips and energy. Daly suggested that AI demand could extend beyond a typical one-to-three-year supply shock, with pressure on chips and energy potentially lasting longer as demand keeps climbing.

That matters for inflation. Policymakers often treat supply shocks as temporary, something to look past rather than fight aggressively. If AI turns a short squeeze into a longer one, that framework gets harder to apply.

A board-wide conversation

Daly is not working the topic alone. Fed Governors including Lisa Cook, Christopher Waller, Michael Barr and Philip Jefferson have delivered multiple AI-focused speeches across 2025 and 2026. Many of those remarks were given in the Bay Area or referenced it directly. The topics ranged widely: productivity gains, inflation dynamics, financial stability risks and the Fed’s own internal use of AI tools.

The San Francisco Fed maintains the EmergingTech Economic Research Network, known as EERN, which studies how emerging technologies such as AI affect the economy. The regional bank has hosted or co-hosted AI-related events before. The November hearing appears to extend that work to a more prominent stage with Board-level involvement.

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A photo of Mary Daly speaking at a podium, with a blurred background of the San Francisco skyline, conveying the intersection of AI and economic policy in the heart of the tech industry.