Tech selloff may ease pressure on the Federal Reserve, says BMO economist

BMO Capital Markets' Jennifer Lee argues that a cooling AI spending boom could give the Fed more room on rates and inflation The AI boom has been great for chipmakers. It has been less great for anyone trying to keep inflation in check. That is the argument from Jennifer Lee, Senior Economist and Managing Director at BMO Capital Markets. Speaking on Bloomberg This Weekend, she said heavy investment in artificial intelligence has helped push both interest rates and inflation pressures higher. Her twist: a cooling in the sector could make the Federal Reserve’s job easier . Heavy AI investment creates demand for energy, labor, and capital all at once. When that much money chases the same scarce resources, prices tend to rise.

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