{
  "id": 15746043,
  "title": "The AI boom doesn’t answer to the Fed",
  "url": "https://urgent.news/2026/10/20/the-ai-boom-doesnt-answer-to-the-fed",
  "topic": "ai",
  "section": "AI",
  "published": "2026-10-20T12:21:26.000Z",
  "source": {
    "name": "Semafor",
    "slug": "semafor",
    "url": "https://www.semafor.com/article/10/20/2026/the-ai-boom-doesnt-answer-to-the-fed"
  },
  "original_language": "en",
  "account": "The AI boom appears to be oblivious to the Federal Reserve's efforts to control inflation, according to a recent report. Liz, an investing expert, warns that \"fighting the Fed\" in the stock market often leads to disastrous results. Contrary to the conventional wisdom that investors should follow the Federal Reserve's monetary policies, Big Tech companies have remained indifferent to the rising cost of borrowing. In fact, AI giants seem to be borrowing more even as interest rates climb.\n\nThis situation has created a problem for the Federal Reserve, which is struggling to bring down inflation that has \"jumped out of its lane\" and spread to unrelated sectors of the economy. Chicago Fed President Austan Goolsbee recently noted that inflation is now affecting various parts of the economy, not just AI-linked sectors.\n\nThe Federal Reserve's main tool for controlling inflation, a 75 basis point increase in bond interest rates, appears to be ineffective in curbing AI companies' spending habits. Tech leaders such as Mark Zuckerberg and Dario Amodei do not act like typical consumers whose spending habits are affected by the cost of borrowing. Instead, they view themselves as historical figures who are working towards achieving superintelligence for the Western world and ushering in an era of intergalactic abundance. They also believe that customer spending on AI has only just begun, and therefore justify their investments based on the potential future revenue.\n\nBoth the AI companies and the Federal Reserve are seeking goodwill and credibility in this situation. If mortgage rates rise to 15% while hyperscalers continue to spend extravagantly, there will be a significant backlash against both parties. At the IMF annual meeting in Bangkok, Jerome Warsh acknowledged that AI investment is creating a \"shock\" to prices, but reiterated his faith in the technology's ability to generate wealth and productivity in the future.",
  "summary": "AI giants keep borrowing as rates rise, blunting the central bank’s main tool against inflation.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}