Fed Governor BARR warned rapid AI adoption may exacerbate inequality in the
short term and urged policymakers to prepare for potential severe labor-market
shocks. He said the scale and duration of AI’s impact will depend on regulatory
safeguards established now. BARR cautioned that market power concentrated in a
few AI firms could amplify inequality—boosting executives’ and shareholders’
wealth while smaller firms lose market share. He said most firms and their
employees may not fully access continuously improving AI resources, reducing
labor income share, raising market concentration and widening inequality. He did
not address monetary policy or provide an economic outlook in his Yale speech.
