BMO Senior Economist Jennifer Lee said a decline in AI stocks could help the Federal Reserve in its fight against inflation by cooling investment tied to data center expansion. According to Lee, hyperscale cloud providers raised large amounts of financing to build data centers, a process that pushed interest rates higher and added to inflation pressure. If AI investment slows, that could reduce some of the burden on the Fed’s inflation campaign.
For crypto markets, Lee said the AI-led sell-off cuts both ways. On one side, weaker sentiment around AI can weigh on digital assets through a broader drop in risk appetite. On the other, if interest rates move lower, Bitcoin and Ethereum may become relatively more attractive. The remarks were cited by Techub, which referenced BeInCrypto.
Techub News, citing BeInCrypto, reported that BMO Senior Economist Jennifer Lee said falling AI stocks could help the Federal Reserve bring down inflation by cooling data center investment.
Lee said hyperscale cloud providers raised significant financing to build data centers, pushing interest rates higher and adding to inflation. If AI investment slows, that would ease some of the pressure on the Fed’s inflation fight.
For crypto, Lee said the AI sell-off may weigh on digital assets through weaker risk appetite. If rates fall, however, Bitcoin and Ethereum could become relatively more attractive.
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