Morgan Stanley (NYSE:MS) said Thursday that artificial intelligence (AI) could keep U.S. interest rates above post-2009 financial crisis levels if the technology boosts productivity without triggering widespread job losses.
AI Productivity Could Reshape Markets
In the bank’s podcast ‘Thoughts on the Market’, its Chief U.S. Economist Michael Gapen said AI’s impact on financial markets will ultimately depend on whether the technology is labor-augmenting or replaces them.
Gapen said if AI follows the path of the internet and the broader digital revolution by boosting productivity while keeping the economy near full employment, it would support faster output and productivity growth, benefit equity and credit markets, and “probably mean that we stay in an interest rate environment that’s certainly higher” than it was after the 2008 financial crisis.
“We think ultimately it’ll benefit markets greatly, similar to what we saw from the mid-90s to the early 2000s,” Gapen added.
