Fed Minutes: AI Infrastructure, Not Tariffs, Is Driving Up US Prices

The Fed's September meeting minutes show officials increasingly believe AI infrastructure building, not tariffs, is the main force pushing up goods prices. Prices excluding food and energy are still rising fast.

The minutes note AI construction's impact on prices is growing, while tariff effects are fading. The Washington Post found officials rarely mentioned AI in economic discussions a year ago, but now bring it up often.

Fed officials expect overall inflation to reach the 2% target only by 2029. Companies are spending and borrowing heavily on data centers, computers, and chips, and the AI boom may push demand past supply, lifting prices further.

Still, officials widely expect AI investment to boost productivity and economic output in the coming years, though the size and timing of these gains remain unclear.