🚨 BREAKING: Powell says AI spending is boosting growth — but could also reshape jobs and monetary policy 🚨
Federal Reserve Chair Jerome Powell just weighed in on one of the most debated topics in markets: AI’s impact on the economy. Powell highlighted that AI investment — especially big spending on data centers and chips — has been a key component underpinning business investment and economic growth, even as inflation and labor-market slack persist.
🔍 Why this matters:
• AI is doing more than powering tech stocks — it’s becoming a macro driver that may support GDP growth in 2026.
• Powell acknowledged that while AI could raise productivity and output, it may also disrupt jobs, depending on how businesses adopt automation and labor-saving tech.
• This framing shifts the narrative: AI isn’t just a market fad — it’s now a policy-relevant economic force that central bankers must reckon with.
📊 Market implications:
✔ Investors should watch productivity data — not just inflation and employment — as part of Fed decision triggers.
✔ If AI-led growth helps balance inflation & output, the Fed may delay aggressive cuts to verify sustained progress.
✔ But if job displacement accelerates without wage gains, Fed could pivot toward supportive easing to counter weakness.
Bottom line: Powell is positioning AI as both an economic engine and structural challenge — something markets must now price into interest rates, equities, and labor-sensitive sectors.