Marks Backs Warsh's Less Talkative Central Bank Push Amid AI Fears

Oaktree Capital co-chair Howard Marks has expressed his support for Federal Reserve Chair Kevin Warsh's push for a less talkative central bank. Marks believes that markets have become too dependent on policy guidance and thinks that the Fed should let the economy do its thing unless it's in danger of going off the rails.

Marks' position closely aligns with Warsh's emerging philosophy, which argues that routine forward guidance has 'overstayed its welcome.' This shift is arriving at a sensitive moment as the Fed raised its benchmark rate by 25 basis points last week to 3.75%-4.00%, citing still-elevated inflation despite solid economic growth.

Marks also highlighted a different long-term risk: artificial intelligence's impact on employment and government finances. He noted that if AI displaces people, they won't pay taxes, which could weaken government tax receipts.