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Dimon warns AI and capital demand could keep inflation and rates high
JPMorgan CEO Jamie Dimon tied higher-for-longer rates to “capital demand” from AI infrastructure build-outs, noting hyperscaler spending could rise from 1.4% of US GDP in 2025 to 3.1% in 2027.
JPMorgan Chase CEO Jamie Dimon warned that heavy demand for capital could keep inflation elevated, which in turn could support higher-for-longer interest rates. Speaking in a CNBC interview, Dimon said inflation reflects both what people expect and the pressure from capital demand.
Dimon cited potential inflationary drivers including “huge infrastructure requirements,” global deficits, wars, and remilitarization, which he said could lift longer-term bond yields. He cautioned that if these forces push rates higher, investors may increasingly demand higher compensation for long-dated Treasuries.
The warning echoes an argument made by a Federal Reserve dissenter, Cleveland Fed president Beth Hammack, who pointed to higher energy prices and demand-side inflationary pressures. Dimon also highlighted the role of AI data center expansion as a major source of capital demand.
The article links that capital demand to an AI build-out, including Alphabet’s plan to raise $25 billion, and cites consensus data from Apollo’s chief economist Torsten Sløk estimating hyperscaler capital spending could climb from 1.4% of US gross domestic product in 2025 to 3.1% in 2027. Dimon added that companies are making calculations around the growing demand for AI models and said productivity gains may take time to emerge after systems are built and deployed.