Fed’s Warsh says US economy not running too hot

WASHINGTON, Oct 28 (Reuters) - Federal Reserve Chairman Kevin Warsh said on Wednesday that the US economy is not running too hot despite some demand pressures from the boom in AI investment, adding that the Fed’s goal "isn’t to throw sand in the gears" of the economy.

Warsh told a news conference after the Fed held rates steady that the US economy is "pointing in the right direction."

"Is the economy running too hot? Is the economy running too strong? That isn’t the judgment of most of my colleagues," Warsh said, adding that potential growth is hard to determine. He said he did not believe that growth itself was causing inflation and making the Fed’s job harder.

"My judgment is we have seen an improvement in productivity. We can’t measure it precisely. I think most of that change in productivity precedes everything we’re talking about superintelligence, but productivity has been moving higher in the economy, however imperfectly measured."