Jefferies' David Zervos Says Fed Was Flying Blind, Warns AI-Led Productivity Gains Could Result In A 'Lot Less' Jobs Created: Report

David Zervos, Chief Market Strategist at Jefferies, reportedly cautioned on Tuesday that the Federal Reserve was “flying blind” by keeping its monetary policy restrictive.

In an interview with CNBC, Zervos cautioned that the Fed will have to consider the possibility of far fewer jobs being created despite the U.S. economy growing at a healthy rate, due to productivity improvements from artificial intelligence (AI) technology.

He stated that nearly 1.5 million jobs had been revised downwards over the last 18 months. However, Zervos noted that many excellent policies outside monetary policy are providing tailwinds to the U.S. economy.

“The Fed was flying blind, really flying blind for many, many meetings. And now all of a sudden we realize, we created all that growth with a lot less jobs.”

— David Zervos, Chief Market Strategist, Jefferies

He also downplayed concerns about a price rise, stating that there is no problem with anchoring inflation expectations.

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