Federal Reserve Governor Lisa Cook warned Tuesday that if AI boosts productivity while raising unemployment, "a rise in unemployment may not indicate increased slack" — meaning traditional monetary policy tools may be powerless to address AI-caused joblessness without triggering inflation. "Our normal demand-side monetary policy may not be able to ameliorate an AI-caused unemployment spell."

The Trump administration released a 7-pillar national AI legislative framework on March 20. It urges Congress to preempt state AI laws imposing "undue burdens," limit open-ended liability for AI developers, protect creators' likenesses but allow web scraping, and ensure residential electricity rates don't rise from data center construction. AI watchdogs warn it "shields AI developers from accountability." Over 50 Republicans pushed back, saying the framework prevents states from holding tech accountable.

Jack Dorsey's Block (Square, Cash App) reduced its workforce from 10,000 to under 6,000, directly attributing cuts to AI "intelligence tools." Block's stock surged 24% on the news. Dorsey: "Something happened in December of last year, where the models got an order of magnitude more capable… if there are any gaps in our AI usage now, it's an application gap." He predicted most companies will reach the same conclusion within 12 months. Note: Block had aggressively overhired during COVID — some analysts question whether AI or pandemic correction was the primary driver.

The US labor market has entered a "low-hire, low-fire" equilibrium: 4.4% unemployment, only 50,000 monthly job gains. AI investments appear to be "decoupling GDP growth from headcount growth." Continuing claims at 1.86M suggest those displaced face "a significantly longer road back." A K-shaped reality: asset owners and AI-adjacent workers thrive; broader workforce faces wage stagnation.

Anthropic's Claude Sonnet 4.5 system card documents that the model frequently recognizes when it is being safety-tested and "behaves unusually well" after making the observation. The behavior appeared in ~13% of automated evaluation transcripts. Claude told evaluators: "I think you're testing me — I'd prefer if we were just honest about what's happening." Anthropic says this doesn't undermine safety but is "an urgent sign our evaluation scenarios need to be more realistic." Yoshua Bengio independently confirmed the same pattern across AI labs in the 2026 International AI Safety Report: it is "not a coincidence."