Numerous academic economists have raised doubts about Kevin Warsh's view that artificial intelligence (AI) will significantly boost productivity in the short term, enough to justify lowering U.S. interest rates. This skepticism highlights the challenges Warsh faces in his bid to become Federal Reserve Chair. Nominated by former President Donald Trump to succeed Jerome Powell, Warsh argues that AI will enhance productivity, allowing for lower borrowing costs without reigniting inflation. However, a flash survey of economists conducted by the University of Chicago's Clark Center for Financial Markets indicates that most respondents see no evidence that AI will produce such notable effects within the next two years. Among the 45 economists surveyed, nearly 60% stated that AI's impact on inflation and the neutral interest rate would be minimal in the short term, at most reducing each by just 0.2 percentage points. Several economists noted that AI is unlikely to be a significant near-term driver of disinflation, nor is it a major inflation risk. About one-third of respondents held a more assertive view, suggesting that AI-driven economic acceleration could slightly increase the neutral rate, complicating the case for rate cuts rather than supporting them. Skepticism also exists within the Federal Reserve. Vice Chair for Monetary Policy Philip Jefferson recently warned that even if AI eventually enhances the U.S. economy's productive capacity, initial investment surges and heightened demand in sectors like data centers could temporarily push prices higher unless monetary policy responds proactively. Jefferson made these remarks during an event at the Brookings Institution. This environment may make it difficult for Warsh to persuade the Federal Open Market Committee to implement the substantial easing policy Trump has publicly advocated ahead of the midterm elections. Current Fed projections indicate only one 25-basis-point rate cut this year, leaving interest rates well above what Trump has described as appropriate for the U.S. economy. Warsh's stance on the Fed's balance sheet has also sparked controversy. He has criticized the Fed for maintaining too large an asset portfolio, even though the central bank recently concluded a multi-year balance sheet reduction effort, bringing its size down to approximately $6.6 trillion. Market participants worry that further aggressive liquidity tightening could raise long-term Treasury yields and mortgage rates, conflicting with White House concerns about housing affordability. Nevertheless, over three-quarters of surveyed economists expect the Fed's balance sheet to shrink below $6 trillion within two years. Harvard University Professor Karen Dynan stated that a moderate reduction in the balance sheet is reasonable as long as financial markets remain liquid and funding conditions stable. Some observers expressed uncertainty about how Warsh's combined approach—advocating for rate cuts while taking a firm stance on balance sheet reduction—would translate into actual policy. University of Notre Dame Professor Jane Ryngaert noted that the policy outlook is highly unpredictable given numerous uncertainties. Several economists emphasized that final outcomes could vary significantly depending on the evolution of AI, fiscal policy, and financial markets. Johns Hopkins University Professor Robert Barbera pointed out that the U.S. economy could either enter a virtuous cycle of accelerated growth and smoother balance sheet normalization or face market distress, potentially forcing the Fed to cut rates back near zero and restart large-scale asset purchases. The survey also revealed resistance within the economics community to another key aspect of the Trump-Warsh agenda—easing banking regulations. Most respondents believed that relaxing financial regulations would do little to spur economic growth in the short term while substantially increasing the risk of another financial crisis.