Kevin Warsh gave a hawkish speech at this year's annual Kansas City Fed Symposium in Jackson Hole, but that doesn't mean the challenges are over. Will the Fed actually pull the trigger on rate hikes? What happens if the central bank doesn't act quickly enough to curb inflation? And how exactly will the new chair want to leave his mark on the Fed? In this episode, we speak with Adam Posen, president of the Peterson Institute for International Economics, who gives us his take on the direction of monetary policy and he grades Warsh's speech. We also discuss why high inflation in the US is different than the inflation seen in other countries, how the Treasury's wading into the bond market affects Fed independence, which of the Fed task forces might be the most impactful, the "messy jobs" theory of AI, and what Warsh really means when he says he wants the FOMC to have a “good family fight.”

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The implications of Fed Chair Kevin Warsh's Jackson Hole speech are pretty clear: Traders expect a rate hike given the hawkish hints littered in his address, largely focused on inflation. There are still a number of open questions and Warsh's lack of forward guidance does not exactly lend clarity to how the Fed will act in the coming months. Today, we recap the speech — in a conversation recorded from the Lodge at Jackson Hole — with Richmond Federal Reserve Bank President Tom Barkin and he explains why his thinking around the Fed's communication policy is changing, and he gets into what is still useful about things like the dot plot. He also tells us what he's hearing at Chamber of Commerce meetings about the impact of AI on local communities, how businesses are using their tariff refund checks, and whether the Fed will have to start paying attention to the economic effects of data center politicization.

Read more:
Bond Investors Wary After Warsh Fuels Wagers That Fed Is Poised to Hike
Where to Invest Now as Data Centers Turn Copper Into a Hot Commodity

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Inflation remains high and the 2% target is farther away than it was this time last year. There are signs all over that the economy is overheating — the strange labor market where hiring and firing remains low, while GDP is growing, but mostly due to AI and the data center buildout — and Chicago Fed President Austan Goolsbee is worried about how uncertain central bankers are about what to do to cool the economy. The next shock, he tells us, could be around the corner. In this conversation, recorded at the Jackson Hole Economic Symposium, Goolsbee explains why he is skeptical of metrics like r*, why he is embracing Kevin Warsh's philosophy around reducing forward guidance, the purpose of the new Fed task forces, and the economic indicators that influence his thinking around reaction function.

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We are back in Jackson Hole! And this year's Federal Reserve Bank of Kansas City symposium on monetary policy might be one of the most interesting editions in years. It marks the first under new Fed Chairman Kevin Warsh, and Fed observers all over the world will be closely watching his Friday speech for signs of how he might further distinguish himself, and the institution he is in charge of, from the Jerome Powell era. This meeting at Jackson Hole also comes at a fascinating, and pretty tense, time for monetary policy in the US and abroad: high bond yields, above-target inflation, and AI's still unrealized effect on broader parts of the economy like the job market. As we have in the past, we speak with Jeffrey Schmid, the president and CEO of the Kansas City Fed, about what to expect and he also shares his thoughts on the wave of baby boomer retirements and how it's affecting the labor force, his recent FOMC votes, and he explains why this symposium is so focused on payments.

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Earlier in August, it was reported that Nigeria's Dangote Refinery secured a $1 billion underwriting for its upcoming stock market listing, which is set to become Africa's largest IPO. Indeed, the whole the continent has seen lots of economic growth in the last few years: According to the United Nations, growth across Africa was expected to reach 4.0% in 2026. The history of economic development on the continent is a vexed one; access to critical resources, whether its minerals or petrochemicals, has not always equated to improved economic conditions. To understand what is going on in Africa, we talk to Joe Studwell, the author of How Africa Works: Success and Failure on the World's Last Developmental Frontier. The product of a decade of reporting, Studwell's book argues that African countries, in many instances, have failed to adopt development strategies (an industrial policy that favors export manufacturing for instance) that mirror Asian counterparts. And while development has been uneven, Studwell is optimistic that the seeds of sustained development are increasingly taking root, at least in some countries. We speak to Studwell about the Dangote IPO, why development has historically been so difficult, Rwanda's dreams of becoming Africa's Singapore, and why Lagos is one of the most impressive cities in the world.

Read more:
Dangote Offers East Africa Nations 30% Stake in New Refinery
T. Rowe Price Says Nigeria Attractive Even After 64% Stock Rally

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Within the AI industry, even the builders of it have been very anxious about the technology. They've talked for years about its potential to create destabilizing job losses. They even spend a lot of time thinking about rogue AI that could lead to human extinction. But for all their anxiety, they missed the thing that's become the most publicly salient: how upset people would be about building data centers. Part of this was understandable. Data center construction has been happening for a long time in America, and it used to be relatively uncontroversial. In fact, cities and states would often design their tax code to incentivize data center construction. Now there's this complete 180. On this episode, we speak with independent writer and Substacker Jasmine Sun, who recently traveled to Wisconsin and Michigan for some on-the-ground reporting about the communities and activists trying to stop data center development. She explains what the pushback is really all about, what it represents, and what future developers will have to do in order to be welcomed in.

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Read more:
Anthropic-Tied Data Center Inks $1.3 Billion Private Credit Loan
Pennsylvania Governor Josh Shapiro to Limit New Data Centers

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The philosopher Nick Bostrom was one of the first thinkers who mapped out the existential risk of AI. In his 2014 book, Superintelligence: Paths, Dangers, Strategies, he delved into various scenarios — like the now-famous “paperclip maximizer” — to show the dangers that unfettered and highly intelligent AI posed to humans. A decade later, in Deep Utopia: Life and Meaning in a Solved World, he looked at the other side of the AI coin, and theorizes what human experience might look like if AI is capable of solving all of our problems. What happens if AI and robots can literally do every single thing better than humans can? How would we find any meaning or satisfaction from life? On this episode, he speaks to us about the two divergent ways of understanding AI's future, what we might do, and what we can do right now to improve the chances that AI actually improves our lives.

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Read more:
Tech Deploys Charm Offensive to Combat AI Data Center Backlash
Young Americans Become More Hostile to AI, Fearing Job Losses

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Scenarios that used to be the domain of sci-fi writers are coming true. We have machines that can talk. We have machines that are capable of ignoring the intent of their creators. And we have machines that are capable of planning and coordinating with other machines to deceive their creators. All of this came together last month, when it was revealed that an unreleased OpenAI model had hacked into the Hugging Face platform in order to obtain answers to an exam it was given. That was alarming enough, but the details that have emerged since then have been even more remarkable. On this episode, we speak with Miles Brundage, a former OpenAI employee who is the founder and executive director of the non-profit AVERI, which pushes for third-party auditing of model-makers and the models themselves. He explains what he learned from the attack and discusses what can plausibly be done to continue building out these models in a safe manner.

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