Artificial Intelligence Models Federal Reserve's Unpredictable Decision-Making

Researchers at George Washington University have successfully used artificial intelligence to simulate Federal Reserve decision-making, achieving 93 percent accuracy in predicting interest rate outcomes over more than two decades of historical meetings. The SIM Fed project, developed by economics professor Tara M. Sinclair and colleagues, represents a novel approach to understanding one of the world's most consequential policy institutions by training AI personas on real FOMC members' speeches, biographies, and regional economic data.