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Fed officials link AI data centers to inflation, keeping mortgage rates high
HousingWire notes Fed hawks have pointed to AI-driven electricity and data center spending as a near-term inflationary force, while a poll cited in the article shows 75% of respondents oppose new AI data center development.
HousingWire reports that Fed officials have cited AI data center investment and related power demand as a near-term inflationary pressure that can keep interest rates elevated, with knock-on effects for housing demand.
The article says shifting rate expectations toward potential hikes helps explain why mortgage rates remain high, limiting buyer activity and fueling political and local pushback against data center expansion.
HousingWire also highlights anti-data-center sentiment that it describes as widespread ahead of the midterms, including moratoriums in red and blue states. It cites a poll in which 75% of respondents said they are against AI data center development.
In addition, HousingWire attributes concerns to specific Fed voices, including Cleveland Fed President Beth Hammack and Minneapolis Fed President Neel Kashkari, who argue AI infrastructure spending can be inflationary and draw capital from other projects such as apartment construction.