The AI Boom Is Making Interest-Rate Decisions Harder

Massive AI-related spending is lifting current economic activity, especially in data centers, chips, power, and grid infrastructure.

BIS and Fed analysis say the timing and size of future productivity gains remain highly uncertain.

That leaves central banks unsure whether the AI boom is inflationary demand, durable growth, or a speculative bubble.

The uncertainty makes interest-rate decisions harder because near-term inflation risks may coexist with longer-term productivity benefits.