Trump Expects AI and Fed Pick to Deliver '90s-Style Boom, But Economists Doubt It

The president believes his Fed nominee can unleash an economic bonanza, but many experts are skeptical of the comparison to the 1990s.

Published on Mar. 2, 2026

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President Donald Trump, Treasury Secretary Scott Bessent, and Trump's pick to lead the Federal Reserve, Kevin Warsh, believe they can replicate the economic boom of the 1990s by leveraging artificial intelligence and having a Fed chair with a 'Greenspan-like mind' who is willing to aggressively cut interest rates. However, many economists are doubtful that the current conditions are comparable to the 1990s and question whether a rate-cutting Fed can deliver the same kind of productivity-driven growth.

Why it matters

The Trump administration's economic strategy hinges on the belief that the right Fed leadership and the rise of AI can produce a repeat of the 1990s economic boom. If successful, it could provide a major political boost for the president. But if the comparison to the 1990s proves inaccurate, it could undermine the administration's economic agenda and credibility.

The details

The Trump team argues that a Fed chair like Kevin Warsh, who is open to slashing interest rates, can unleash an economic bonanza similar to what happened in the 1990s under Alan Greenspan's leadership. Back then, Greenspan kept rates low despite rising wages, betting that productivity gains driven by the internet would keep inflation in check. Many economists, however, say the current conditions are very different, with rising trade barriers, growing budget deficits, and uncertainty around how quickly AI can boost productivity. They warn that cutting rates aggressively now could backfire by fueling inflation.

  • In September 1996, the Federal Reserve under Alan Greenspan decided to hold off on raising interest rates, allowing the economy to take flight.
  • From 1997 through 2000, the U.S. economy grew over 4% annually, the unemployment rate fell to 3.8%, and inflation remained below 2%.
  • In mid-1999, the Federal Reserve eventually reversed course and started raising interest rates, taking the benchmark rate from 4.75% to 6.5% in less than a year.

The players

Donald Trump

The President of the United States who believes the right Fed leadership and AI can deliver a 1990s-style economic boom.

Scott Bessent

The U.S. Treasury Secretary who has stated on social media that the president seeks to replace Federal Reserve Chair Jerome Powell with someone who has an 'open, Greenspan-like mind.'

Kevin Warsh

Trump's nominee to become the next Federal Reserve chair, who has argued that AI-driven productivity gains could justify lower interest rates.

Alan Greenspan

The former Federal Reserve chair whose policies in the 1990s are seen as fueling the economic boom, though some economists argue his later actions are being overlooked.

Jerome Powell

The current Federal Reserve chair whose term is set to end in May, and whom Trump has repeatedly attacked for not cutting interest rates aggressively enough.

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What they’re saying

“The administration is offering a rather distorted version of what actually happened in the 1990s.”

— Dario Perkins, Economist at TS Lombard (ksgf.com)

“Our nation can see productivity boom like we did in the '90s when we are not encumbered by a Federal Reserve which throws the brakes on.”

— Scott Bessent, U.S. Treasury Secretary (Instagram)

“The analogy to the late 90s is a little harder for me to understand. It wasn't, 'Should we cut rates because productivity growth is higher?'”

— Austan Goolsbee, President of the Federal Reserve Bank of Chicago (ksgf.com)

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.