Trump Seeks to Recreate '90s Boom with AI and Fed Pick

Economists express doubts about the administration's economic strategy.

Published on Mar. 2, 2026

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President Donald Trump, his Treasury secretary, and his nominee to lead the Federal Reserve believe they can replicate the economic boom of the 1990s by leveraging artificial intelligence and installing a Fed chair with a 'Greenspan-like mind'. However, many economists are skeptical that the current economic conditions and policy environment are conducive to such a replay of the '90s.

Why it matters

The Trump administration's economic strategy could have significant implications for the direction of monetary policy, productivity growth, and the overall trajectory of the U.S. economy in the coming years. Economists warn that the administration's rosy view of the 1990s economic boom is an oversimplification and that current conditions are vastly different, potentially undermining the feasibility of their plans.

The details

The Trump administration believes that by nominating Kevin Warsh to lead the Federal Reserve and embracing the productivity gains promised by artificial intelligence, they can recreate the economic boom of the 1990s under Alan Greenspan's Fed. However, economists argue that the administration is offering a 'distorted version' of what actually happened in the '90s. While Greenspan did keep interest rates low in the face of strong productivity growth, the economic backdrop was very different, with the government running budget surpluses rather than the large deficits seen today. Additionally, factors like globalization and immigration also played a key role in controlling inflation at the time, which are now being reversed by the Trump administration's own policies.

  • In the mid-1990s, then-Fed Chair Alan Greenspan contended with rising wages but tame inflation, leading him to believe that official productivity numbers were understating the gains.
  • From 1997 through 2000, the U.S. economy grew over 4% annually, the unemployment rate fell to a 30-year low of 3.8%, and inflation remained below 2% for 17 straight months.
  • In 2025, productivity improvements were observed, which some economists attribute to early adoption of AI, though others argue they reflect investments in automation made during the COVID-19 pandemic.

The players

Donald Trump

The President of the United States who believes the U.S. economy can replicate the 1990s boom by leveraging AI and installing a Federal Reserve chair with a '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.

Scott Bessent

The U.S. Treasury Secretary who said on social media that the president sought to replace Jerome Powell with someone with 'an open, Greenspan-like mind'.

Alan Greenspan

The former Federal Reserve chair whose policies during the 1990s economic boom the Trump administration is seeking to emulate.

Michael Barr

A Federal Reserve governor who said the AI boom is unlikely to be a reason for lowering policy rates.

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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, TS Lombard

“The AI boom is unlikely to be a reason for lowering policy rates.”

— Michael Barr, Federal Reserve Governor

“Companies don't change that fast. It's expensive to change. It's risky to change. The managers don't necessarily understand the new technology that well. So they have to learn how to use it. They have to train their staff. All that stuff takes a long time.”

— Martin Baily, Senior Fellow Emeritus, Brookings Institution

What’s next

The Senate will decide whether to confirm Kevin Warsh as the next Federal Reserve chair, which could set up a potential clash between Warsh's views and those of his potential future colleagues on the Fed's interest-rate setting committee.

The takeaway

The Trump administration's plan to recreate the 1990s economic boom through AI and a Greenspan-like Fed chair faces significant skepticism from economists, who argue that the current economic and policy environment is vastly different from the conditions that enabled that previous period of strong growth and productivity gains.