As geopolitical conflicts in the Middle East show signs of subsiding and the AI investment boom intertwines with economic uncertainty, the Federal Reserve's policy direction has once again become the central anchor for global investors. The logic behind its interest rate decisions, its indirect impact on the AI industry, and the resulting asset allocation strategies collectively form the core trading framework for the current market.
Regarding interest rate policy, the Fed is delaying easing measures while maintaining a wait-and-see approach, rather than shifting towards tightening. In response to the surge in energy prices triggered by the situation in the Strait of Hormuz, the Fed has clearly signaled a policy stance focused on observation and postponed rate cuts. Fed Chair Jerome Powell emphasized on Monday that current policy is "in an appropriate state," with inflation expectations "remaining well anchored." He noted that the central bank typically downplays supply-side shocks like oil price spikes, as monetary policy operates with a lag. By the time tightening effects materialize, energy shocks often subside, potentially unnecessarily dampening the economy. New York Fed President John Williams added that policy is "fully prepared" to address short-term inflationary pressures and economic risks from rising energy costs. This stance indicates that the Fed's easing bias has not reversed but is merely delayed due to geopolitical risks. Market expectations have shifted from pricing in a potential rate hike in December to anticipating a roughly 3-basis-point cut at the final meeting of 2026. Although the timing of rate cuts has been significantly pushed back, there remains room for a 50-basis-point reduction by year-end. The core reason is that the current macroeconomic environment differs markedly from 2022: economic growth is slowing, the labor market is weakening, policy rates are nearing neutral levels, and high inflation stems more from supply shocks than overheating demand. Higher energy prices may actually curb consumption, ultimately prompting the Fed to proceed with easing.
However, the Fed's interest rate management faces challenges as traditional signals lose effectiveness. Former Fed official Peter R. Fisher noted that the Phillips curve's relevance has significantly declined, and unemployment data's reference value is not what it used to be. Income and wealth inequality further diminish the impact of interest rate tools on inflation, as the top 20% of earners—who are less constrained by credit costs—account for 60% of consumption. This means rate hikes have limited effect on overall demand and inflation control. Additionally, the market signaling function of long-term rates has been distorted by quantitative easing (the Fed's previous bond purchases artificially suppressed long-term Treasury yields). Moving forward, the Fed must gradually withdraw its intervention in long-term rates without triggering market turmoil, which constrains its policy flexibility (the Fed cannot taper its balance sheet too quickly for fear of reducing bond buyers and spiking long-term rates, potentially crashing equity markets).
The Fed has not introduced specific policies targeting the AI industry, but based on its monetary policy logic and market observations, AI is not currently a core factor in rate decisions. However, imbalances within the sector have caught the attention of regulators and policymakers. A Bank of America report明确指出, AI's impact on the macroeconomy is gradual. While it may contribute about 0.4 percentage points to U.S. GDP growth in the short term, its influence on monetary policy remains relatively limited compared to factors like the labor market, fiscal policy, and energy prices. AI's inflationary effects are also minimal thus far, mainly manifesting in energy demand from data center construction and wealth effects from stock market gains. These pressures are not yet sufficient to force a Fed policy shift. Nevertheless, Fed officials and market experts have warned of investment imbalances in the AI sector. Former SEC Chair Gary Gensler highlighted that AI infrastructure capital expenditure reached $400 billion in 2025 and is projected to climb to $500–600 billion in 2026, while generative AI's direct revenue is only about $50 billion. This "heavy investment, light returns" imbalance will inevitably correct through market mechanisms, with downside risks significantly outweighing upside potential. Historical experience shows that such frenzies often lead to industry consolidation and valuation resets. Fisher added that large fixed-cost expansions by AI firms could disrupt supply chains and create quality control issues, urging investors to carefully assess capital recovery cycles. More importantly, policy uncertainty is concentrating capital in government-supported areas like AI and domestic manufacturing, potentially constraining overall productivity growth over the next 3–5 years. Such structural imbalances may indirectly affect the economic growth and inflation fundamentals underpinning Fed policy.
Gold's pricing logic has shifted from short-term safe-haven dominance to hedging against medium-to-long-term Fed rate cut expectations. As signs of easing geopolitical conflicts emerge, falling oil prices may alleviate inflationary pressures, creating room for Fed easing. Gold is highly sensitive to real interest rates, and declining rate expectations would significantly ease its valuation pressures. Additionally, the medium-to-long-term weakening trend of the U.S. dollar and de-dollarization efforts provide further foundational support for gold.
As of 15:37 Beijing time, spot gold was trading at $4,744 per ounce.
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