Institution: AI's capital expenditure competition ignores interest rates, weakening the Federal Reserve's tight stance.

Tosten Strock of Apollo wrote that borrowing costs in the US may still rise, as expectations of a tight monetary policy by the Federal Reserve have not slowed the country's economy and inflation as textbooks predicted. He attributed this to investments in AI. "In fact, despite rising interest rates in recent months, the average expectations for capital spending in 2027 continue to rise... In other words, there are no signs that the market expects AI capital spending to slow down next year." Strock said that the hyperscale cloud service providers are very afraid of missing out on the data center battle, to the point where they seem to not mind higher interest rates. "There is a fear of missing out among hyperscale cloud service providers," he said.