Investor Stanley Druckenmiller warns AI infrastructure spending could create an earnings bubble if future profits fail to justify the costs. He remains positive on the technology but says U.S. interest rates are still too low as companies finance the build-out.
The Financial Times reported that Big Tech companies are using guarantees to support as much as $300 billion in debt tied to AI data centers and chips. The Federal Reserve raised its target range by a quarter point on Sept. 16 to 3.75%-4%, while saying inflation remained high. The Financial Times also reported that SoftBank raised more than $11 billion in high-yield bonds to fund its OpenAI investment; initial talks put rates on the dollar-denominated notes at about 9%-10%.
Chicago Fed President Austan Goolsbee said that if persistent inflation is driven by strong demand rather than temporary supply shocks, officials may need a stronger policy response. He also cautioned that growing AI investment could push overall demand above sustainable levels, potentially adding to that pressure.
