Enormous capital expenditures in artificial intelligence technology and data centers are helping to drive growth in the U.S. economy and stock market, but Powell said Wednesday that he doesn’t expect interest-rate policy to have much effect on these plans.
“There’s a lot of data centers being built and other investments being made around the country and around the world, and big U.S. companies are just investing a lot of resources in thinking about how AI…is going to affect their businesses, so it’s a big deal,” Powell said.
But those investments would likely be taking place even if the Fed wasn’t cutting interest rates. “I don’t think that the spending that happens to build data centers all over the country is especially interest sensitive,” Powell said. “It’s based on longer-run assessments that this is an area where there’s going to be a lot of higher productivity.”
