Fed Chair Warsh says higher rates are reaching AI investment

Asked on Wednesday whether AI spending is immune to interest rates, Federal Reserve Chair Kevin Warsh said he had been "skeptical of that view. Interest rates get in the cracks," and that since early September rates "have had an effect," with widening for some assets. He called the capital-spending story "not just robust, not just strong, but it is broadening." The Fed held its rate at 3.75% to 4%.

On productivity he said "we have seen an improvement," but that most of it "precedes everything we're talking about." The central bank's chair is saying borrowing costs are already sorting the AI buildout, the same week data-center bonds stalled. SourcesA

Sources

ATranscript of Chairman Warsh's Press Conference, October 28, 2026 (Federal Reserve)federalreserve.gov

This story ran in the Morning Brief of October 30th 2026.

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