BlackRock Executive Claims Fed Chair Kevin Warsh Views AI as Key Inflation Driver

Jeffrey Rosenberg, a managing director at BlackRock, said that Fed Chair Kevin Warsh has linked tightening financial conditions to artificial intelligence (AI) after the Fed left rates unchanged at 3.75%–4% in June. Warsh’s sensitivity to AI was highlighted in the Fed’s June minutes, which flagged AI‑driven demand as an inflation risk. Rosenberg argues that a shock to AI would be primarily disinflationary, potentially easing the case for further rate hikes and supporting rate‑sensitive assets such as Bitcoin. He notes that market rates have shifted focus from oil to the AI trade, with AI stocks and long‑term Treasury yields moving in opposite directions, suggesting bonds could serve as a hedge. The Fed’s next move will determine whether this hedge holds, as core inflation remains above 2.6% and the PCE data due Thursday could influence future policy. The potential impact on Bitcoin is tied to its historical correlation with tech stocks and the broader AI sector.