Fed's Tom Barkin: 'AI apocalypse' has not arrived

Barkin's remarks come as the Federal Reserve has moved back toward higher rates because inflation has proved more persistent than policymakers expected. He noted that six months ago it was easier to argue inflation's persistence was temporary, and that oil prices, tariffs and the AI buildout would eventually morph away. Now, with persistent tariff costs, higher gasoline prices and a huge wave of AI investment pushing up prices for some technology equipment, Barkin said inflation looks like it has been here for a while. He described the job inherited by Kevin Warsh with a log flume metaphor, capturing the bind of moving back toward higher rates while an enormous wave of AI investment reshapes prices and the labor market.

On AI itself, Barkin said the technology is already being used for coding, call centers, compliance paperwork and engineering. But he also offered a less obvious possibility: AI could make it easier to bring inexperienced workers into skilled trades, citing auto mechanics as an example where an AI assistant could give a less-experienced worker a real-time checklist. He said he's hearing a lot less fervency in the conviction that the AI apocalypse is coming than there was six months ago.

The stakes hinge on whether companies can translate task-level AI efficiency into redesigned staffing models, and on whether strong earnings continue to deter layoffs. For finance chiefs and workforce planners, the question may be less about replacing workers wholesale and more about how to reorganize tasks and roles as AI adoption spreads—an organizational challenge that Barkin suggests remains largely unresolved.