Federal Reserve Chair Kevin Warsh told the IMF meetings in Bangkok that the AI boom is a “shock” that is pushing up prices now, with productivity gains coming only later. He declined to say whether the Fed will raise rates at its meeting later this month, two days after inflation hit a four-month high. The Fed raised rates in September for the first time since 2023, and consumer prices were up 3.7% in the year to September. Warsh named two inflation drivers: the war with Iran, which has pushed Brent above $105 a barrel, and AI investment in chips, data centers and power that is adding to demand. After his remarks, futures-implied odds of a rate hike fell from about 30% to roughly 17%.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on hngn.com ↗
Keywords
Kevin WarshFedinflationinterest rates
Open a keyword to see other news on the same topic.
Related tickers and likely impact
DXY
▲ Likely positiveRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/16/2026 | 101.78 |
| Change that session | -0.20% |
XAU/USD
▼ Likely negativeRelevance: medium
| Market | Gold |
|---|---|
| Close on 10/16/2026 | 4,165.63 |
| Change that session | -0.13% |
QQQ
▼ Likely negativeInvesco QQQ Trust
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/16/2026 | 709.80 |
| Change that session | -2.50% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Will the Fed Raise Rates This Month ? Here What Markets Say .
Consumer prices rose 3.7% year over year in September and 0.6% from August, while core inflation was 2.6% annually and 0.3% monthly, all above forecasts. The article says the data points to a second consecutive Fed rate hike at its Oct. 27-28 meeting, but futures traders put an 85.1% chance on rates staying at 3.75% to 4%, with a 74.1% chance of a hike when the Fed meets in early December. The two-year Treasury yield has eased from 4.93% to 4.73% but remains above the current rate, and futures traders see a 65% chance of at least three quarter-point hikes by the end of 2027, taking the rate to 4.5% to 4.75%. Research by Charles Schwab and others suggests stocks perform better when the Fed raises rates slowly, and the author views new Fed Chair Kevin Warsh, in office since May, as an incrementalist, which he considers good for investors.
- 3 Words From Fed Chair Kevin Warsh Suggest the Worst Is Yet to Come for Wall Street
The article argues that Fed Chair Kevin Warsh's repeated use of the phrase “dose of accommodation” signals that the Fed does not view monetary policy as restrictive and may keep raising rates. The FOMC raised rates by 25 basis points to 3.75%-4.00% on Sept. 16, and the article notes that September PPI later rose 6.3% on a headline basis and 5% for core PPI. The author contends that higher borrowing costs could weigh on debt-funded AI infrastructure spending and slow AI growth projections, and that valuations leave little margin for error.
- 3 Words From Fed Chair Kevin Warsh Suggest the Worst Is Yet to Come for Wall Street
Fed Chair Kevin Warsh repeatedly said the Fed had 'removed a dose of accommodation' at its September meeting, a signal that inflation remains a concern. September producer prices rose 6.3% on a headline basis and 5% on a core basis, above expectations, though headline inflation had eased from its 4.2% peak in May. The Fed voted 12-0 on Sept. 16 to raise rates by 25 basis points to 3.75%-4.00%, and the author argues further hikes could come in December and through 2027. Because much AI infrastructure spending is partly debt-financed, the author warns that rising borrowing costs could slow AI growth, noting the market is the second-priciest in history.
- Global Gold Prices Hard to Forecast
Global gold prices topped $4,200 an ounce early in the week before falling to $4,073 after U.S. September inflation data and a stronger dollar, then recovered at week's end after Fed Chair Kevin Warsh gave no signal of an October rate hike. In a Kitco News survey, 33% of respondents expected gold to rise, 17% expected a fall and 50% expected it to stay flat or sit out. Bulls pointed to a $4,400-4,500 range as political risk eases ahead of the midterm elections, while cautious analysts said the Fed is unlikely to raise rates by a total of 70 basis points as markets expect, and gold could slip slightly even though support near $4,100 holds. Others were neutral, expecting gold to hover around $4,200 next week.
- Fed chair Warsh says price stability is key but shies away from signals about rates
- Fed sees AI boom adding to inflation headache , but others may pay for the medicine
The Reuters article reports that the AI investment boom, increasingly seen at the Federal Reserve as a driver of inflation, forces central bankers to cool the rest of the economy with higher rates, and the pain falls unevenly. Small businesses, credit-dependent households and a weak housing market may bear the brunt, while large AI firms such as Amazon, Apple and Anthropic are seen as largely immune to rate hikes. ADP chief economist Nela Richardson said the Fed's 2% inflation goal has been unmet for more than five years and that fewer routes to it remain open. Fed Chairman Kevin Warsh called AI investment a “shock” to prices and demand, with the industry expected to invest about $1 trillion next year, roughly 3% of GDP. The Fed meets October 27-28 and is expected to hold rates at 3.75%-4.00%, while officials debate the pace and extent of further hikes.
Related markets
Latest news
- Winning over Vingroup and Sun Group with concrete and special materials: Vietnamese company's profit up 136%, chairman speaks out
Song Da Cao Cuong (SCL) reported Q3/2026 profit of VND 38 billion, up 136%, on net revenue of over VND 263 billion (up nearly 98%), while gross profit margin rose from about 36% to 41%. For the first nine months, revenue reached nearly VND 666 billion (up 81%) and after-tax profit nearly VND 94 billion, already exceeding more than 110% of its full-year profit target. Chairman Kieu Van Mat attributed the results to technology upgrades, production line optimization and capacity expansion, with several new plants expected to start operations by November 2026. The company said it spent more than two years testing its products before Vingroup accepted them; Vingroup's share of its business has fallen to about 25% as customers expanded to around 10 major groups and exports began to Laos, Cambodia and the Philippines. Over the past two years, the company has invested about VND 1,000 billion in factories and technology.
- Coteccons Chairman Bolat Duisenov reveals new direction: expanding home construction for individual customers
At the annual general meeting on October 20, Coteccons (HoSE: CTD) set fiscal 2027 targets of VND 42,000 billion in revenue and VND 1,050 billion in after-tax profit, and said it is considering expanding into residential construction for individual customers (B2C). In fiscal 2026, net revenue reached VND 34,340 billion (up 38%, 115% of plan) and after-tax profit VND 788 billion (up 73%); new contract wins totaled VND 60,307 billion and backlog was about VND 70,000 billion. In the first quarter of the new fiscal year, the company booked revenue of VND 11,270 billion and profit of VND 306 billion, but new contract value of VND 14,519 billion was lower than a year earlier; the company said it is tightening criteria for selecting clients and projects. Coteccons is also working with Microsoft, is expected to become a strategic partner of Workday, and targets raising its ROE from 10% to 15-18% by 2030.
- UPS Yields 6.7% After Firing Amazon. Here's Whether the Dividend Survives 2027.
UPS shares yield 6.7% as of October 16. The company has moved away from high-volume, low-margin Amazon deliveries and froze its dividend earlier this year, ending a 16-year streak of increases. The article says the payout will likely remain frozen through 2026 and 2027, citing competition from 10- and 30-year Treasury yields above 5% and other industrial dividend payers, but calls the dividend's safety questionable: UPS generated $5.47 billion in free cash flow in 2025, with $5.4 billion going to dividends, and free cash flow is projected to fall to $5.05 billion in 2026 and $5.01 billion in 2027, with the dividend absorbing about 98% of 2026 free cash flow. Rising competition and high fuel prices add pressure, and the article suggests investors may find more safety in the industrial sector.
- Asian shares mostly decline after AI stocks lead a rebound on Wall Street
Asian shares mostly fell in cautious trading on Tuesday after AI-related stocks rebounded on Wall Street, while other sectors stayed shaky and oil prices stayed high. Japan's Nikkei 225 slipped 0.6% to 64,512.35 in early trading, South Korea's Kospi dropped 2.8%, and Australia's S&P/ASX 200 lost 0.8%. On Wall Street, the S&P 500 rose 0.4% and the Nasdaq gained 1.1%, helped by Nvidia's 1.4% gain, while most stocks outside AI and tech fell and the Dow slipped 0.1%. The 10-year Treasury yield climbed to 5.14%, and U.S. crude rose to $103.50 a barrel and Brent to $109.47, as uncertainty about when the energy industry will return to normal after the war with Iran means oil is unlikely to ease soon.
- Asian shares mostly decline after AI stocks lead a rebound on Wall Street
Asian shares mostly fell in cautious trading Tuesday after AI-related stocks rebounded on Wall Street, while other sectors stayed shaky and oil prices remained high. Japan's Nikkei 225 slipped 0.6% to 64,512.35, Australia's S&P/ASX 200 lost 0.8% to 8,772.10, and South Korea's Kospi dropped 2.8% to 5,605.31. On Wall Street, the S&P 500 rose 0.4% and the Nasdaq rallied 1.1%, helped by Nvidia, while the Dow fell 0.1%. The 10-year Treasury yield climbed to 5.14%, and U.S. crude rose 0.15% to $103.50 a barrel as uncertainty over the war with Iran kept oil prices elevated.
- What Could X-Energy (XE) Gain From Its 960MW Indiana Nuclear Project?
X-Energy (NasdaqGS:XE), American Electric Power and Amazon agreed to assess a 960 MW advanced nuclear project in Indiana using Xe-100 reactors, on a former coal plant site. Under the joint development agreement, Amazon would provide development funding and commit to a long-term power purchase. The article says the deal offers commercial validation for X-Energy's reactor platform rather than immediate financial relief, as the company, with a $4.3b market cap, reported $150.28 million in revenue, a $448.87 million loss, and a 20.2x price-to-sales ratio. The next key milestone is whether the study reaches a final investment decision for the Sullivan County site.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.