FED CHAIR WARSH SAYS HE WAS SKEPTICAL THAT INTEREST RATES WOULD NOT HAVE AN EFFECT ON AI, THAT RATES AFFECT ALMOST EVERYTHING, AND THAT SINCE EARLY SEPTEMBER, BOTH INSIDE AND OUTSIDE THE TECHNOLOGY COMPLEX, INTEREST RATES HAVE HAD AN EFFECT

Fed Chair Warsh stated that he was skeptical interest rates would have no effect on artificial intelligence, arguing that rates affect nearly everything, and noted that since early September, both inside and outside the technology complex, interest rate sensitivity has been evident, though the headline is cut off before the full claim is stated. The transmission mechanism Warsh is pointing to runs through the discount rate applied to long-duration equity cash flows: higher policy rates raise the required return on growth assets whose earnings sit far in the future, compressing valuations even when fundamentals hold. Because AI-linked companies carry heavy capital expenditure and rely on external financing for data centers and compute infrastructure, borrowing costs feed directly into their investment economics, making high-multiple technology names and capital-intensive AI infrastructure the most exposed segments. Rate-sensitive sectors such as utilities, real estate, and small caps are also implicated, while the dollar and Treasury yields reflect the repricing of the policy path. Traders should watch the next CPI print and the Fed's upcoming communications for signals on whether t

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