FOMC Debates AI-Driven Inflation as June Power Prices Rise 4%

3 articles · Updated · The Motley Fool · Jul 24

June FOMC minutes showed officials split over AI: most saw heavy infrastructure spending as a source of persistent inflation, while some argued later productivity gains could lower costs and expand supply.
4% higher electricity prices in June underscored the near-term pressure, as data-center power demand and broader AI build-outs strain capacity and feed through to goods and services.
Kevin Warsh has argued AI will be disinflationary over time, but some policymakers said rate decisions should rest on current, measurable price effects rather than uncertain productivity promises.
Markets now expect multiple rate hikes before year-end, a path that could curb inflation but also weigh on AI-heavy corporate spending, debt-reliant smaller firms and equity valuations.