AI's Biggest Threat Isn't AI

Fed Chair Kevin Warsh took a hawkish stance, arguing inflation remains persistent and there is “no rush” to cut rates despite recent positive data. He highlighted that AI-driven capital spending is supporting U.S. investment growth, with more than half of recent capex growth attributed to AI infrastructure. Overall, the rate-cut delay risk is likely to pressure rate-sensitive assets even as AI capex provides a partial offset.