Fed Flags AI Spending as New Inflation Risk, Signals Possible Rate Hike

The Federal Reserve has identified rising investment in artificial intelligence as a new structural source of inflation, signaling that another interest-rate increase remains possible.

Minutes of the Federal Open Market Committee's June 16-17 meeting, released on July 8, showed AI investment emerging for the first time as a new inflation risk. Only a few months ago, AI spending was rarely mentioned in internal Fed discussions. It is now cited alongside the war in the Middle East and tariffs as a key factor that could keep prices elevated.

The minutes said several participants noted that increased corporate spending on AI infrastructure could become a new force sustaining price pressures. The Fed's assessment is that the AI investment boom is not merely supporting growth at technology companies. It could also drive up demand for data centers and semiconductors at the same time, adding to inflationary pressure.

Park Shin-young, New York correspondent nyusos@hankyung.com