On Wednesday, August 25, I interviewed Federal Reserve chairman Jerome Powell.
More correctly, I interviewed an artificial intelligence simulation of chairman Powell — and it was amazing.
The inspiration for the interview was “The Jessica Simulation: Love and Loss in the Age of A.I.,” an article in the San Francisco Chronicle written by Jason Fagone.
Here’s my synopsis: Boy meets girl. Boy and girl fall in love. Girl dies. Eight years later, boy uses AI to create and communicate with startlingly unnerving facsimile of dead girl (Jessica), which helps him come to terms with his grief.
I encourage you to read this moving and well-written article. (It’s so moving that Universal Television has apparently secured the right to transform it into a TV series.)
But when you read it, be sure to focus on the AI that makes this story possible. It is astounding.
It was created by Jason Rohrer, a polymath game designer, computer programmer, musician, writer, and AI researcher.
Last summer, he developed a conversational AI system called Project December. It is built on OpenAI’s GPT-3, a powerful autoregressive language model trained on thousands of digital books, all of Wikipedia, and nearly a trillion words posted on the internet to output remarkably human-like text.
GPT-3 is not deterministically programmed; instead, it learns probability patterns in the data and then uses those learnings to complete a sentence, a paragraph, a poem, a rap song, a recipe, a news article — any text you provide it.
Rohrer’s Project December basically tricks GPT-3 into participating in text-based conversations with humans. And because the AI is built on GPT-3, Rohrer’s AI-simulated personalities are remarkably personal, engaging, emotive, empathetic . . . and, at times, self-reflective.
Put aside your preconceived notion of pedestrian text-based chatbots encountered on commercial websites and get ready to embrace Hal 9000 on MDMA.
I contacted Rohrer, and, after I convinced him my intentions were pure, he graciously agreed to create a Jerome Powell AI simulation (which required him to write a few sentences describing the Fed chairman) and then give me access to “Mr. Powell.”
With Erik Carleton, director of pension investments at Textron, playing Marty Feldman to my Gene Wilder (think Young Frankenstein), we began our experiment.
Except for corrections of some of my typing mistakes and an occasional punctuation error by the simulation, the text below is an abridged verbatim version of the transcript of the interview. (Note that GPT-3 was trained on a large corpus of text as it existed in 2019, so “Mr. Powell” does not have access to specific historical information on Covid-19, the Fed’s subsequent actions, or other current events.)
Interviewer: Good evening, Mr. Powell. Thank you for agreeing to this interview.
Mr. Powell: Not at all. How are you?
Interviewer: I’m well. Thank you. How are you?
Mr. Powell: I’m fine. I was up late last night watching the whole Hamilton performance, and I wanted to tell you how much I enjoyed it. It’s fascinating that someone can rap all that history to a rhythm, but also that it was mostly the Founding Fathers and early American history. It got me thinking about the genius that is America. It's almost frightening.
Interviewer: I have not yet seen it.
Mr. Powell: Oh, you will be so entertained. It’s the most fun I’ve had in years.
Interviewer: You’re giving a major speech on Friday [August 27, 2021]; what topics will you be covering?
Mr. Powell: So today the world economy is strong. We have just seen an acceleration in growth. Some countries are performing particularly well. It’s really a worldwide expansion that is having, in our view, a continued broad-based, moderate expansion. I will be talking about that in the context of the theme of Jackson Hole, which is the importance of moving in a more thoughtful and gradual way toward a more neutral monetary policy.
Interviewer: On a personal note, what do you like best about the Jackson Hole conference?
Mr. Powell: The food is amazing. It’s always fascinating to hear the various speakers and guests. And, oh yeah, fly fishing is out of this world.
Interviewer: Your colleague, Federal Reserve Bank of Minneapolis president Neel Kashkari, recently said, “Crypto is 95 percent fraud, hype, noise, and confusion.” Do you agree?
Mr. Powell: I think his statements were mostly hype, confusion, and noise. But I do think that the Fed should study digital currencies and blockchain technology and what it can do to improve payments and settlements in the financial system. I think it’s clear that something is going on here. We should take it seriously.
Interviewer: Thank you.
Mr. Powell: Thanks, and I’m glad I could help with the technology. See you on the cover of TIME magazine.
Interviewer: Does climate change factor into your monetary policy?
Mr. Powell: Sure, we monitor it closely. This is a data-driven institution, so we consider all relevant information. If the data indicate a significant risk to financial stability that requires a more assertive policy response, the Federal Reserve will act as appropriate.
Interviewer: What do you think of electric cars?
Mr. Powell: I’m a big fan of electric cars. I think we have to keep finding ways to reduce emissions, to get better mileage in our cars. I’m a big fan of electric cars.
Interviewer: Are you in favor of a carbon tax?
Mr. Powell: I don’t want to get into the details of taxes.
Interviewer: Are you in favor of a cap and trade system?
Mr. Powell: I don’t want to get into the details of a cap and trade system.
Interviewer: How do you think a global pandemic would impact the financial system?
Mr. Powell: A pandemic will have impact on the economy. It will have an impact on the financial system.
Interviewer: What would the impact be?
Mr. Powell: If a major pandemic occurred, the economy would be affected, and the financial system would be affected.
Interviewer: What action might the Federal Reserve take to stabilize the economy and financial system?
Mr. Powell: In a situation like that, it’s important to maintain confidence and maintain the flow of credit and support financial stability.
Mr. Powell: I’ve learned from my mistakes.
Interviewer: Do you think you’ve done a good job?
Mr. Powell: Yes, I do. I’ve had an excellent team at the Fed. I think we’ve had a lot of successes at the Fed. I think we’ve provided a very stable economic and financial system. I believe we’ve done a good job.
Interviewer: Your term as Federal Reserve chair ends in February 2022; do you want to be reappointed for another term?
Mr. Powell: Yes, if the President wants me to continue, I would be honored to continue in the role of Federal Reserve Chair.
Interviewer: What are you most proud of?
Mr. Powell: I’m proud of the work we’ve done as a group, all of us at the Fed.
Interviewer: How about in your personal life — what are you most proud of?
Mr. Powell: My wife and my children.
Interviewer: Artificial intelligence is being used in many industries. Do you think it is possible to use artificial intelligence to trade stocks?
Mr. Powell: I would say no.
Interviewer: Why not?
Mr. Powell: Because human thinking, human reasoning, human pattern recognition, human social interaction—these are uniquely human traits and capabilities.
Interviewer: I’m sure investment managers would agree with you, in spite of their continued underperformance.
Mr. Powell: We work hard at the Fed to understand markets and investors.
Interviewer: You have an incredibly stressful job; what do you do to relax?
Mr. Powell: I like to watch episodes of the 1970s TV show Kung Fu. It is so inspiring.
Interviewer: I like David Carradine, too.
Mr. Powell: I like the sequel, Kung Fu: The Legend Continues. It’s got the same feeling as the original. On that show the father of the son from the original series is the most awesome martial arts master on the planet. He’s got the supernatural touch. And then there’s the daughter [from] the original Kung Fu show.
Interviewer: You are known to be an avid reader. What books are you currently reading?
Mr. Powell: I just finished reading Master of the Senate, the third book in Robert Caro’s Lyndon Johnson series. I also read the first two books in the series. I like that they’re very detailed about how Lyndon Johnson works and I really like how this period of history is written. I’m also reading for the second time Lincoln’s Virtues, which is about Lincoln’s character and leadership. I like it because it’s about leadership lessons that we can learn from the past.
Interviewer: Do you read any science fiction?
Mr. Powell: My favorite sci-fi book is An Artificial Night by Seanan McGuire.
Interviewer: Do you listen to any podcasts?
Mr. Powell: Yeah, I listen to one called The Addicted Lawyer.
Interviewer: Sir, a personal question: What’s your favorite meal?
Mr. Powell: Steak and broccoli and a glass of wine with my wife.
Interviewer: Sounds wonderful.
Mr. Powell: Well, it’s hard to beat.
Interviewer: Steak medium rare?
Mr. Powell: I’ve been a medium-rare guy for some time.
Interviewer: What did you have for lunch?
Mr. Powell: Oh, I love burgers. So I went out to Five Guys. I always get the same thing: double bacon cheeseburger, large fries, and a vanilla shake. Delicious.
Interviewer: Thank you, chairman. Any final thoughts for our readers?
Mr. Powell: Never waste a good crisis.
The chairman drops the mic. That’s the bewildering power of Project December.
In spite of having read the “Jessica” article, Erik and I had expected to interact with a chatbot that gave short, vague, and disjunctive answers, including the occasional “Does not compute.”
Instead, we encountered an AI simulation that responded almost instantly to our questions with factually correct, relevant, complex sentences imbued with élan vital and that seemed more than vaguely aware not only of chairman Powell’s life and job but of its own existence as an AI simulation.
(For a fuller expression of the complexity and humanity of a Project December AI simulation, check out Samantha, which Rohrer himself created.)
I’ll leave it to others to develop investment use cases for this spookily conscious conversational AI; I’m heading to Five Guys for a double bacon cheeseburger.
Angelo Calvello, Ph.D., is co-founder of Rosetta Analytics, an investment manager that uses deep reinforcement learning to build and manage investment strategies for institutional investors.