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Chair points to surge in business investment; AI-related CapEx 'nearly 20%' in April
Summary
The chair highlighted strong growth in business investment and said AI-related high-tech equipment and software showed April growth rates of nearly 20%, a development that complicates timing and supply-side effects for monetary policy.
The Chair said the "most striking feature of the economy is the strong growth of business investment," and that "in the AI related category of high-tech equipment and software, the most recent data shows April growth rates of nearly 20%." He said the surge is helping sustain manufacturing output but warned the precise timing and magnitude of supply-side effects on prices are hard to predict.
Officials described capital expenditure as preparing the ground for future growth while noting it may complicate the Fed’s task of judging inflation persistence. The chair stressed that while CapEx supports output, its inflationary implications require careful monitoring rather than immediate conclusion.
