Fed's Barr (voter) says R* has risen slightly but not dramatically.

• There is a risk AI could raise structural unemployment over time.
• Some of the strong productivity outlook owes to Ai boost.
• AI investment is 'wildly indifferent' to what the Fed rate target is.
• Fed can afford to take its time on monetary policy.
• Reasonable to expect inflation to wane as tariff impact abates.
• Low hire, low fire job market is not very dynamic; vulnerable to shocks.

Fed's Barr's comments suggest a more measured approach to monetary policy, as he indicates that while R* has slightly increased, it hasn't changed significantly. His remarks imply confidence in the inflation outlook and the Fed's ability to remain patient, which could impact market expectations for future rate hikes. The mention of AI's potential effects on the job market adds a layer of complexity, signaling the Fed’s awareness of structural economic shifts that could arise from technology advancements.