by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens by examining early evidence that AI is beginning to reshape labor markets in select sectors. We then turn to Spirit Airlines and how its distress could serve as a gauge of how the US might respond if the war begins to weigh more heavily on the economy. Next, we provide an update on Iran, explain why Beijing is pushing back against US investment, and highlight new signs that states are advancing redistricting efforts. As always, we include an overview of recent domestic and international economic data.

AI Job Cuts: The growing adoption of AI has prompted many firms to reduce headcount as they reallocate resources toward investment in the technology. Companies are increasingly restructuring operations to better capture AI-driven efficiencies and enhance profitability. The impact has been most pronounced in service-oriented sectors, particularly within technology and finance. A recent uptick in layoffs, especially in industries historically associated with strong wage growth, is likely to intensify broader concerns about AI’s effect on employment.

• Tech and finance companies are leading the charge to reduce headcount as a way to offset rising AI-related spending. Meta recently announced plans to lay off 10% of its workforce while also scaling back hiring. Microsoft, meanwhile, has begun offering early retirement packages to employees whose combined age and years of service total 70 or more, as it targets a 7% reduction in staff. In financial services, KPMG has not only cut its number of audit partners by 10% but also reduced employee benefits and paid time off.
• The push by technology and financial firms reflects their heavier investment in AI, which has also contributed to disproportionately large workforce reductions in these sectors. According to Ramp’s AI Index, 77% of technology companies have already adopted AI, compared with roughly 68% in finance, both well above the estimated nationwide adoption rate of around 50%. At the same time, employment in these sectors has been on a steady decline since 2024.
• The drive to reduce headcount reflects efforts by technology and financial firms to fund expanding AI initiatives and improve overall efficiency. This is especially evident in the tech sector, where companies are ramping up spending on AI infrastructure and building out data center capacity across the country. In finance, firms are likewise using workforce reductions to cut costs while automating a growing share of routine and analytical tasks through the use of AI tools.
• The move by technology and financial firms to offset AI investments with reductions in headcount has not yet spread broadly across the US corporate landscape. As AI adoption becomes more widespread, however, similar strategies are likely to emerge in other industries. We expect that deeper AI integration will boost profitability over time, but it could also heighten the risk of labor pushback. That dynamic could turn AI into an increasingly salient political issue, introducing additional volatility for the sector in the period ahead.

Takeover of Spirit? Discussions between the federal government and struggling airline Spirit over a potential bailout have intensified, as the White House has entertained the possibility of a takeover. The move comes as the airline industry is showing strain due to the impact that higher energy prices, driven by the ongoing conflict, are having on certain businesses. The White House’s decision to intervene is a reminder of the government’s increasingly interventionist approach as it looks to shield the economy from external shocks.

• The government had initially been weighing a roughly $500 million loan package in exchange for warrants that would give it an equity stake in the airline. However, as Spirit edges closer to potential liquidation, the administration has shifted its stance. On Thursday, the president indicated that any rescue could involve the government purchasing the company outright and selling it once jet fuel prices retreat.

• While Spirit Airlines’ latest bankruptcy is its second in less than a year, it comes at a time when the broader industry is under mounting pressure from rising fuel costs. The strain is especially severe for low-cost carriers, which have limited room to absorb higher input costs, forcing them to raise fares and cut flights as margins are squeezed. Major carriers such as American Airlines, Alaska Airlines, and United Airlines have all reported dimmer earnings outlooks due to higher jet fuel prices.
• That said, there is still little evidence that other industries outside of airlines are facing the same degree of strain. However, the situation could worsen if shortages become more widespread and companies are forced to scale back production in response to rising costs. At the same time, the federal government’s talks over a potential Spirit takeover suggest that the White House is increasingly willing to intervene when it believes sector-specific stress could spill over into the broader economy.

Iran Update: The White House announced that Israel and Lebanon have extended their ceasefire agreement by three weeks, while Iran has said it will send representatives to Pakistan for discussions, though the United States has yet to confirm its participation. These developments suggest there is little appetite for a return to full-scale hostilities, even as each side seeks to preserve leverage at the negotiating table. In our view, markets should remain relatively calm so long as the ceasefire holds and active fighting does not resume.

Beijing Says No: Chinese regulators are moving to curb US investment in certain domestic private firms by tightening approval requirements. Authorities have instructed companies considering funding from American investors to obtain government approval before proceeding with any deals. The shift follows Meta’s unreported acquisition of Manus, which has prompted a regulatory probe in China, and reflects Beijing’s efforts to limit US capital flows into businesses that it deems sensitive to national security.

Redistricting Fight: Florida may be positioning itself to redraw its congressional map in a way that further favors Republicans. The move follows similar efforts in Virginia earlier this week and builds on Texas’s push to reshape its electoral map. While these changes are often framed as attempts to influence the balance of power in the upcoming November elections, they could also carry significant implications for the 2028 cycle. Even so, in our view, Democrats remain strongly favored to retake the House in the midterms.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with a discussion of the recent chipmaker market rally. We then assess the dollar’s reserve‑currency status in light of its increased usage following the conflict in Iran. Next, we examine the US bailout of Spirit Airlines, Washington’s growing reliance on dollar swap lines to avert forced asset sales abroad, and SoftBank’s expanding investment in AI. As always, we include an overview of recent domestic and international economic data.

 AI Leads Market: Chipmakers continue to outperform the broader market, driven by sustained demand for AI-related technologies. The semiconductor sector has now recorded its longest consecutive winning streak in history, reaching 16 straight days of gains. This rally has been fueled by investors increasingly looking past the conflict in Iran and refocusing on core market themes, with growing confidence that the worst of the geopolitical disruption has passed. This run highlights the market’s heavy reliance on AI-related companies to maintain positive momentum.

• Much of this strong performance is being driven by the AI boom, which has fueled a surge in demand for memory chips that continues to outpace supply. This imbalance reflects a broader acceleration in capital spending, as major technology companies invest heavily in cloud infrastructure to support AI model training. Industry leaders — including Texas Instruments, Nvidia, Broadcom, and Micron — have reported robust earnings, underscoring their critical role in supplying chips to data centers.
• The strength has also extended overseas, with several countries benefiting from increased exports as they expand their AI infrastructure. Southeast Asian economies, in particular, have seen gains, supported by strong performances from key players such as TSMC and SK Hynix — the latter reporting the fastest earnings growth in its history. Meanwhile, Chinese chipmakers SMIC and Hua Hong posted record results, and European semiconductor equipment leader ASML also delivered a strong quarter.
• However, despite the strong earnings, much of this performance predates the recent disruption to global supply chains stemming from the conflict in Iran. The closure of the Strait of Hormuz has made key inputs more difficult to secure for chipmakers seeking to expand production to meet rising demand. While attention has largely focused on oil markets, constrained helium flows also pose a significant risk to semiconductor supply chains.
• While US companies may be relatively insulated due to domestic helium production, international firms are more exposed to supply disruptions. This is particularly true for Asian economies, which rely heavily on Qatar for helium supply. QatarEnergy, a major global provider, sustained damage during the Iranian drone attacks, further constraining availability. Transportation also presents challenges, as helium can warm and boil off during extended transit, limiting the effectiveness of rerouting supply.
• The recent winning streak for chipmakers is an encouraging signal for market fundamentals, but it also suggests that investors may already be looking past the war in Iran, potentially prematurely. While both sides currently appear reluctant to return to full-scale fighting, the conflict’s supply-chain risks have yet to fully filter through to markets. Against this backdrop, we think adding selectively to value exposures remains sensible for investors prioritizing capital preservation.

Dollar’s Global Role: Since the conflict in Iran began, the dollar’s usage has risen to historic levels, according to SWIFT data. The international clearing network reports that the dollar accounted for 51.1% of global transactions — the highest share since SWIFT revised its data methodology. At face value, this suggests the dollar’s dominance remains largely intact as it shows that countries are still relying on the greenback to make international transactions. However, we believe underlying shifts may be occurring.

• The dollar remained the dominant reserve currency in 2025, but its long‑term role is being widely debated as policy uncertainty, rising fiscal deficits, and shifting trade and tariff strategies are leading investors to reassess their exposure to dollar‑denominated assets. At the same time, political and economic pressures have raised questions about the Federal Reserve’s ability to maintain a sufficiently hawkish stance to contain inflation risk, reinforcing concerns about the dollar’s future appeal.
• Keep in mind, changes in reserve‑currency status typically unfold over decades and in distinct phases rather than overnight. After World War I, it was increasingly clear that sterling was losing ground as the leading reserve currency, as Britain’s heavy war debts and reduced ability to supply global liquidity constrained its role. Yet, it took the post–World War II Bretton Woods order and episodes such as the Suez Crisis to solidify the dollar’s position at the core of the system and relegate sterling to a secondary status.
• The recent increase in dollar usage reinforces the depth of its reserve currency status. Despite growing headwinds, many countries have raised the share of their transactions conducted in dollars — a clear sign that the greenback remains one of the world’s most trusted currencies. While the dollar’s elevated usage during the Iran conflict might be viewed as cementing its reserve status, it more likely reflects that no credible rival has yet emerged, leaving the dollar as the default reserve currency for now.
• That said, we expect the erosion of the dollar’s reserve currency status to be a long, gradual process, likely marked by periodic setbacks. This means that many countries will probably continue holding dollars as they wait for an alternative currency to emerge. In the meantime, the lack of a viable competitor will likely lead central banks to prioritize gold purchases as their primary means of diversifying away from currency holdings.

Trump Airways? The Trump administration is in advanced talks to take over struggling airline Spirit. The deal would include the federal government paying $500 million for a stake in the company. Spirit has struggled to remain profitable since the COVID-19 pandemic, and ongoing geopolitical tensions have made matters worse due to rising jet fuel prices. The move is another reminder of the government’s growing role in the economy.

US Swap Lines: US Treasury Secretary Scott Bessent has indicated that a growing number of Gulf countries are seeking dollar swap lines to help maintain dollar liquidity. The access would allow those countries to secure dollars without resorting to panic selling of dollar-denominated assets. More broadly, this would mark yet another instance in which the current administration has considered or deployed measures affecting currency markets, alongside earlier discussions around Japan’s FX challenges and the establishment of a swap line with Argentina.

Softbank Loan: The multinational conglomerate is seeking a two-year, $10 billion margin loan backed by its stake in OpenAI. The facility reportedly includes an option to extend for an additional year, giving the company more flexibility in managing its leverage profile. The move underscores how aggressively SoftBank is leaning into the AI boom, using its OpenAI holdings to lower borrowing costs and monetize a highly valued, still-private and not-yet-profitable AI model provider.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment opens with our takeaways from the Senate hearing for the Federal Reserve chair confirmation. We then update the situation in Iran, emphasizing our concerns that the extended truce remains fragile. Next, we discuss the reported unauthorized access to a powerful cybersecurity-focused AI system, outline the EU’s emerging plans to cushion households from rising utility costs, and explain why Canada now feels more confident pursuing trade talks. As always, we include an overview of recent domestic and international economic data.

 Warsh Goes to Washington: On Tuesday, Fed Chair nominee Kevin Warsh faced the Senate Banking Committee for his confirmation hearing. During his testimony, he was pressed with difficult questions about how he would lead the Federal Reserve and manage his relationship with the president. Though his answers remained largely vague and predictable, Warsh did offer a glimpse into how he might change the central bank if he were to take the helm. That said, his confirmation remains far from certain.

• Several lawmakers pressed Kevin Warsh on whether he could remain independent of the White House in setting monetary policy and whether any of his financial investments posed a conflict of interest. He denied that the president had ever pressured him to cut interest rates and said that if such pressure arose, he would refuse. Additionally, he stated that he is prepared to divest from any holdings flagged by ethics officials. His assurances appeared to be sufficient to satisfy most on the committee.
• Warsh also fielded questions about how he would manage the Fed’s day‑to‑day operations and its balance sheet strategy. He offered few specifics, but suggested the central bank should rethink its communications approach, hinting at possible changes to press conferences and forward guidance. He also signaled support for aggressively reducing the Fed’s balance sheet, a stance shared by some other FOMC members, including Fed Governor Stephen Miran.
• Warsh’s testimony raised no major alarms, but his confirmation remains uncertain. Senator Thom Tillis has vowed to block a committee vote until the Justice Department’s investigation into Chair Jerome Powell concerning the costly headquarters renovation is resolved. Tillis said he wants to support Warsh, but only if the “vindictive” prosecution of Powell ends. Though Tillis has suggested shifting oversight of the renovation to Congress, the White House backs the Justice Department’s probe, leaving Warsh’s nomination on hold.
• A delay in Kevin Warsh’s confirmation could extend Jerome Powell’s tenure at the Federal Reserve, as Powell has indicated he would serve as chair pro tempore if a successor is not in place when his term ends. In that scenario, the White House could intensify efforts to remove him, further heightening concerns about presidential influence over Fed policy and, in turn, adding to financial market volatility. We remain cautiously optimistic that cooler heads will prevail, and the confirmation will proceed on schedule.

 Iran Truce Extended: The White House announced it has extended the cease-fire with Iran indefinitely to keep negotiations on track. President Trump explained that this extension reflects internal divisions within the Iranian government, which have thus far prevented a final agreement. Iran, however, maintains that the deadlock persists due to its refusal to hold talks while the US continues its naval blockade in the strait. Although the extension has increased confidence that conflict will not resume, the truce remains fragile.

• The decision to extend the talks comes as both sides seek to prevent further fighting while they review each other’s proposals. The move to allow a grace period follows Vice President JD Vance’s cancellation of his planned trip to Pakistan for negotiations, after Iran signaled reluctance to proceed with the meeting. For now, the White House has emphasized that it is waiting for Iran to submit a new proposal.
• Although markets have breathed a sigh of relief that the US has not resumed strikes on Iran, it remains unclear how long the current truce will hold. On Wednesday, Iran attacked three ships and seized two that were transiting the Strait of Hormuz, in what appears to be retaliation for a US operation against an Iranian vessel over the weekend. The attack has likely called into question whether or not the ceasefire will hold.
• One of the main obstacles to a deal appears to be the growing influence of Iranian hardliners over the negotiation process. Reports suggest that the Islamic Revolutionary Guard Corps has effectively sidelined President Masoud Pezeshkian and assumed control over key state functions in Tehran. If confirmed, this would mark a significant escalation, implying that moderates have less say in the talks, which could increase the risk that fighting between the US and Iran will resume.
• Recent weeks have seen markets adopt a more optimistic view of the conflict, and any further signs of diplomatic progress should help sustain that momentum. That said, a sudden breakdown in talks and/or renewed fighting would likely deliver a sharp blow to risk sentiment. While growth stocks have performed well as tensions have eased, we continue to see a compelling case for value given the high level of market uncertainty surrounding the conflict.

 Anthropic Breach: The company believes unauthorized users may have gained access to its newest AI system, Mythos. The breach has heightened concerns that a malicious actor could exploit the model to enhance or automate cyberattacks. Anthropic has kept Mythos tightly restricted amid internal worries that its capabilities are powerful enough to pose meaningful safety risks if misused. Although there is no confirmation that a bad actor actually accessed the system, the prospect of an AI‑enabled cyberattack remains a serious market risk.

 EU Energy Package: The EU is preparing an emergency energy package that would give national governments more scope to shield households from rising energy prices. The bloc is encouraging member states to rely on existing rules, or introduce targeted adjustments, that would allow them to borrow more in order to finance subsidies to help households cover power bills. While this should provide some support to growth, it is also likely to push public debt higher, adding to upward pressure on euro-area government bond yields.

 Canada Trade Deals: After securing a parliamentary majority, Canada is weighing separate trade deals with the United States and China. Prime Minister Mark Carney argues that the majority gives him the mandate to reopen USMCA negotiations with the US and Mexico, set for review on July 30. Meanwhile, he faces domestic pushback on a potential China trade deal over fears it could hurt Canada’s manufacturing base. Holding talks with both economic powers could boost Canada’s leverage in each negotiation.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with an update on the war in Iran, where it remains unclear whether a new round of US-Iran peace talks will be held this week. We next review several other international and US developments that could affect the financial markets today, including a move by Japan to dismantle its longstanding restrictions on arms exports and Kevin Warsh’s confirmation hearing in the US Senate this morning.

United States-Israel-Iran: As of this writing, a new round of US-Iran peace talks is still up in the air, with Iranian officials reportedly telling regional mediators they are prepared to send a negotiating team to Pakistan but not yet saying so in public. It is unclear whether a complete US team is on the ground in Islamabad. At the same time, reports today say the US military in the Indo-Pacific region has boarded an oil tanker known for working with the Iranians. That move was likely designed to put further pressure on the Iranians to negotiate.

• Separately, the Wall Street Journal today carries a story highlighting how Iran-backed militias in Iraq and other countries have been launching missiles and drones at US allies in the region, including Saudi Arabia, creating a kind of war within a war. The militias sometimes coordinate with the Iranian military but other times operate independently. That will complicate whether and how peace can be brought to the region.
• Other new reports by energy consultants say US refiners are reaping enormous profits from the spike in global diesel and jet fuel prices touched off by the war. According to the reports, a major advantage for US refiners is the relatively cheaper domestic oil feedstock, allowing them to sell dear at low cost.

Japan: The cabinet of Prime Minister Takaichi today approved a measure ending Japan’s ban on exporting lethal military equipment. Weapons exports will be approved by the National Security Council and will be limited to countries that have a defense and tech transfer deal with Japan. There are currently 17 such countries, and the number is expected to grow. The new rules are widely expected to transform Japan’s defense industry into a strong competitor for global arms sales — a development that will likely create interesting new opportunities for investors.

European Union-United Kingdom: JPMorgan Chase yesterday said it will include the EU and UK in its 10-year, $1.5-trillion lending program for defense and critical industries. The program aims to funnel capital to sectors deemed essential to national security, including defense, energy, infrastructure, pharmaceuticals, quantum computing, and AI. The bank’s move is consistent with our view that investors will still find opportunities in Europe’s rearmament and resilience efforts despite the economic headwinds from higher energy prices caused by the war in Iran.

United Kingdom: Prime Minister Starmer yesterday said he unintentionally misled parliament when he said his former ambassador to the US, Peter Mendelson, had full security clearance. Starmer was forced to fire Mendelson last year after it was discovered that he had extensive ties with Jeffrey Epstein, and press reports last week revealed that Mendelson had failed the security vetting process.

• The scandal further weakens Starmer’s political position, raising the risk that Labour Party rivals will try to replace him.
• If Starmer is ultimately replaced, current British economic policy could shift, including the prime minister’s current effort to rebuild trade and investment ties with the European Union.

Poland: Rejecting the recent proposal by President Nawrocki and central bank chief Glapiński to sell Polish gold reserves to finance military expenditure, Finance Minister Domański yesterday said Warsaw would move forward with its plan to tap the European Union’s 150-billion EUR ($176 billion) Security Action for Europe defense fund to buy needed weapons. However, it isn’t clear how the government can get around Nawrocki’s veto of the needed legislation.

• In any case, the dispute shows how the Polish gold-sale proposal is tied to internal political disputes between the right-wing Nawrocki and Glapiński, who want to weaken Poland’s ties to the EU, and the government of Prime Minister Tusk, who advocates for stronger ties with the EU.
• All the same, it remains true that many central banks and other investors have recently sold gold amid the tumult of the war in Iran. Much of that gold selling likely reflects efforts to raise liquidity to pay for higher energy costs.

US Monetary Policy: Kevin Warsh, President Trump’s nominee to be the next Fed chair, will face a confirmation hearing in the Senate today at 10:00 AM ET. The Senators are expected to focus on whether Warsh has promised the president to cut interest rates aggressively, even if economic and financial market conditions argue for higher rates. Any statement by Warsh could have a big impact on bond and stock values today as the testimony proceeds.

US Antitrust Policy: Yesterday afternoon, the Department of Justice said it had launched a criminal price-fixing investigation into major beef processors including Tyson Foods, Cargill, JBS, and National Beef. The probe into possible criminal wrongdoing was more stringent than expected and suggests the administration is willing to act quite aggressively against firms to either bring down consumer prices or shift the blame for high prices onto producers ahead of the November mid-term elections.

• Agriculture experts and economists generally attribute today’s high beef prices to a drought that has prompted farmers to trim their herds, reducing supply.
• Nevertheless, the administration’s stance is likely to raise regulatory risks for a range of consumer firms.

US Labor Market Policy: The White House late yesterday announced that Labor Secretary Lori Chavez-DeRemer has resigned to return to the private sector. Reports indicate Chavez-DeRemer resigned under pressure after months of accusations centered on misuse of funds and a potential inappropriate relationship. Her resignation marks the third time President Trump has ousted a cabinet member in the last two months, perhaps signaling heightened political concerns ahead of the mid-term elections.

US Artificial Intelligence Industry: In the latest high-profile AI deal, Amazon yesterday said it would invest at least $5 billion in AI giant Anthropic in return for Anthropic’s commitment to buy more than $100 billion worth of cloud computing services from Amazon. The deal could help ensure that the massive new data-center capacity that Amazon is building will actually be used. Amazon shares therefore jumped sharply in response to the news.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with an update on the war in Iran, where the US has seized an Iranian-flagged container ship, and the Iranians say they have again stopped traffic through the Strait of Hormuz. We next review several other international and US developments with the potential to affect the financial markets today, including the election of a pro-Russia government in Europe and new research projecting that productivity increases associated with artificial intelligence will cause price inflation to plummet.

United States-Israel-Iran: President Trump yesterday said the US has seized an Iran-flagged vessel in the Gulf of Oman, marking the first known use of force in the US blockade of ship traffic into and out of Iranian ports. In retaliation, the Iranian government said it is closing the Strait of Hormuz to shipping again. However, in a sign that peace talks may still proceed, US negotiators reportedly traveled to Pakistan yesterday for a new round of negotiations. It is unclear whether the Iranians will participate.

• The Iranian announcement that the strait is closed again has reportedly stopped additional ship traffic through the waterway.
• According to reports, the United Arab Emirates’ central bank last week approached US officials, including Treasury Secretary Scott Bessent, to discuss a currency-swap deal that would allow the UAE to access dollars if the Iran war continues to constrict its oil exports. The talks highlighted the UAE’s concern that the war could inflict major damage on its economy and its position as a global financial hub, potentially depleting its foreign reserves and scaring away investors.

Germany: The Wall Street Journal over the weekend carried an interesting article on how the German government’s recent fiscal reforms and rearmament effort are combining to transform the economy’s focus from industrial manufacturing for export to advanced defense goods. The analysis is generally consistent with our longstanding view that the threat of Russian aggression and the US’s growing reluctance to stand by its allies will force precisely this kind of change, giving a further boost to German and other European defense stocks.

Bulgaria: In elections yesterday, the leftist Progressive Bulgaria Party came in first with 130 of the 240 seats in parliament, ensuring that Russia-leaning party chief and former President Rumen Radev will become the new prime minister. Now that Hungary’s Russia-leaning government has been replaced, the result could mean that Bulgaria takes the lead in pushing Moscow’s interests in the European Union and the North Atlantic Treaty Organization. In turn, tensions with the EU and NATO could weigh on Bulgarian economic growth.

China: Technology giant ByteDance, the parent company of TikTok and Douyin, today said its net profit plummeted by more than 70% in 2025 as it poured money into artificial intelligence. The report underscores the massive switch in financial performance for the world’s top tech firms as they shift to costlier, more capital-intensive AI. The firm also said revenue growth in China slowed to only about 20%, underscoring the domestic economy’s continued economic headwinds. On a more positive note, revenue from overseas markets surged by nearly 50%.

Emerging Markets: In a speech today, the head of the Bank for International Settlements warned that the growing use of US-dollar stablecoins by less developed countries could undermine their control of money flows and open the door to criminal activity. Specifically, the BIS chief, former Spanish central bank governor Pablo Hernández de Cos, said stablecoins will make it easier for people and companies to evade capital controls or tax obligations, raising the risk of financial crises or economic problems.

US Artificial Intelligence Industry: The asset-management arm of Northern Trust has released a new report projecting that widescale adoption of AI will be “massively disinflationary” due to expected productivity gains. Just as important, the report urges the Federal Reserve to avoid making any major policy moves until AI’s impact on prices is known. While the warning seems a bit premature, the report’s specific reference to the Fed highlights how all manner of federal policies could be disrupted as AI rolls out and its impact become clearer.

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