Fed Chair Powell (Q&A) says building AI data centres pushes inflation up at the margin, probably also raises the neutral rate

Fed Chair Powell's remarks indicate that advancements in AI infrastructure are contributing to inflationary pressures, which could also lead to an increase in the neutral interest rate. This suggests a potentially tighter monetary policy stance as the Fed navigates the balance between growth and inflation, impacting market dynamics across fixed income and forex. Traders should watch for implications on the USD and interest rate expectations moving forward.