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AI-Simulated Fed Meeting Shows Political Pressure Polarises Policymakers

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A new study from George Washington University has used AI agents modeled on Federal Reserve policymakers to simulate a July 2025 FOMC meeting — and the results suggest that political pressure can fragment decision-making even inside the central bank.

The research, by Sophia Kazinnik and Tara Sinclair, programmed AI agents with each policymaker’s historical stances, biographies, and speeches, then fed them real-time economic data and financial news. The AI-driven board reached decisions much like the real FOMC — but when political scrutiny was introduced, dissent increased and consensus eroded.

“This simulation shows that the Federal Reserve is only partially insulated from politics,” the authors wrote. “Outside scrutiny can shape internal decision-making, even in an institution guided by formal rules.”

Central Banks Turn to AI

While no central bank is ready to let AI set monetary policy, many are adopting the technology to improve analysis and efficiency:

  • Federal Reserve: researched generative AI to analyze FOMC minutes.

  • European Central Bank: uses machine learning to forecast euro-area inflation.

  • Bank of Japan: applies AI to economic analysis; its 2023 study used large language models to track price drivers shifting from raw materials to labor costs.

  • Reserve Bank of Australia: testing AI tools that summarize policy-related questions, though Governor Michele Bullock stressed the tech is for analysis, not policymaking.

A Bank for International Settlements (BIS) report in April noted AI’s “strategic importance” but said most central banks remain in the early adoption phase, citing governance and data quality as key hurdles.

The Fed simulation underscores both the promise and perils of applying AI to policymaking: while powerful at capturing complex dynamics, it also exposes how political forces might destabilize even rule-bound institutions.

Amazon Removes Diversity References from Annual Report

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Amazon has removed references to “inclusion and diversity” from its 2024 annual report, signaling a shift in its approach to diversity, equity, and inclusion (DEI) programs. This change follows a December memo from Amazon executive Candi Castleberry, in which she stated that the company would wind down outdated DEI initiatives by the end of 2024. The memo emphasized integrating DEI practices into existing processes rather than running separate, individual programs.

For the past two years, Amazon’s annual report had included a statement in its “human capital” section, highlighting the company’s focus on inclusion and diversity as part of its commitment to being the “Earth’s best employer.” The 2024 version of the report omits this mention entirely and also removes a reference to a goal of “promoting equity” in employee hiring and development efforts.

The removal of DEI references comes as many large corporations, including other tech giants like Meta and Alphabet, scale back similar initiatives following political pressures and challenges from conservative groups. These groups have targeted corporate diversity programs, and legal threats have emerged, urging companies to reconsider their DEI policies.

While Amazon’s website still states its commitment to diversity and inclusion, the company’s move to reduce its focus on these programs reflects broader shifts in corporate America, with some companies, such as Disney, also scaling back or adjusting their diversity-related efforts. Despite the changes, Amazon did not provide further details about potential alterations to DEI-related employee positions.