AI Capex Race Ignores Interest Rates, Blunts Hawkish Fed -- Market Talk

Dow Jones05-27 21:51

0950 ET - Borrowing costs in the U.S. could still move higher because hawkish Fed expectations aren't slowing the economy and inflation, as the textbook would have predicted, Apollo's Torsten Slok writes. Investment in AI is to blame, he says. "In fact, despite the move higher in rates in recent months, the consensus forecast for capex in 2027 continues to rise...In other words, there are no signs that the market is expecting a slowdown in AI capex next year." Slok says hyperscalers are so afraid of missing out on the data center race that they don't seem to mind higher interest rates. "There is FOMO among hyperscalers," he says. (paulo.trevisani@wsj.com; @ptrevisani)

(END) Dow Jones Newswires

May 27, 2026 09:51 ET (13:51 GMT)

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