Institutions: AI capital expenditure race ignores interest rates, undermining the Federal Reserve’s hawkish stance

He stated that this is due to investments in AI. "In fact, despite rising interest rates in recent months, the average expectation for capital expenditure in 2027 continues to climb... In other words, there is no indication that the market expects AI capital spending to slow down next year." Slok said that hyperscale cloud service providers are so afraid of missing out on the data center race that they seem unconcerned about higher interest rates. "There is a fear of missing out among hyperscale cloud service providers," he said.