Commentary: AI buildout may be disinflationary, but the Fed uses it as cover for Main Street neglect
McDonaghMatthew · x · 2026-09-21
- Responding to Kevin Warsh's claim that the Fed is accommodative, the author argues the AI buildout is not a conventional credit-sensitive boom but a strategic race financed by hyperscalers' internal cash flows and privileged capital access — so rate hikes wouldn't stop it.
- The buildout is capital-intensive, productivity-enhancing and supply-expanding, potentially disinflationary over time.
- The real critique: Wall Street celebrates the boom because it profits from it, while the Fed uses narrow Big Tech spending as cover for prolonged restraint on the interest-sensitive Main Street economy.
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