The relationship between Trump and the Federal Reserve
• Conflicts in policy ideology: During his presidency and campaign, Trump vigorously promoted tax cuts and deregulation policies to stimulate economic growth, while the Federal Reserve, based on its analysis of economic data, believes that moderate interest rate hikes or maintaining stable rates is necessary to prevent economic overheating and financial risks, and to maintain sustainable economic growth, indicating a clear mismatch in policy ideologies.
• The game of political pressure and independence: Trump has publicly criticized the Federal Reserve's interest rate hike policy and suggested firing Fed Chairman Powell, demonstrating his dissatisfaction with the Fed's monetary policy and attempts to intervene. However, the Federal Reserve maintains a relatively independent position, with its core responsibilities being to control inflation and ensure financial stability, and it will not easily be swayed by political factors.
The relationship between Trump and AI
• Policy support and industry promotion: Trump has shown considerable interest in artificial intelligence, having signed the 'American AI Initiative,' prioritizing AI technology as a key area for foundational research and investment, and pledging to increase investments in AI to consolidate the U.S.'s competitive edge in this field. Additionally, he plans to appoint a 'Secretary of AI' responsible for AI affairs.
• Regulatory attitude and industry development: Trump has expressed a desire to abolish Biden's executive orders that hinder AI innovation, indicating a tendency towards deregulating AI, which may accelerate capital injection and the industrialization and application of AI, further strengthening support for the domestic AI industry in the U.S., but it may also bring certain risks.
The relationship between the Federal Reserve and AI
• The impact of AI on monetary policy: Fed Governor Bowman pointed out that artificial intelligence may influence monetary policy through its economic impact, such as changes in the labor market, affecting productivity, natural unemployment rate, and natural interest rate, among others. Furthermore, broader use of AI can also verify the reliability of data, thereby improving the quality of the data that monetary policymakers rely on for decision-making.
• The impact of monetary policy on the AI industry: The Federal Reserve's monetary policy can influence the development of the AI industry to some extent. In a low-interest-rate and loose monetary environment, businesses and investors find it easier to obtain funding, which may encourage more investment in AI research and applications, thereby promoting the development of the AI industry; conversely, a tight monetary policy may put financial pressure on the development of the AI industry.
