# BMO Economist Says Slower AI Spending Could Ease Fed Inflation Pressure By Enna Lee Canonical URL: https://www.tokenpost.com/news/investing/45878 Published: 2026-11-01T13:47:03.000Z Updated: 2026-11-01T13:47:03.000Z Section: Investing > Jennifer Lee said a pullback could ease demand for energy, labor and capital, while labor shortages and automation continue to support long-term demand for AI infrastructure. Slower investment in artificial intelligence could ease inflation pressure from demand for energy, workers and capital, giving the Federal Reserve more flexibility on interest rates, BMO Capital Markets economist Jennifer Lee said. The AI buildout involves large outlays for data centers and advanced chips. It also increases competition for energy, labor and capital. Lee said moderating investment could reduce some of the pressure on those resources. She also argued that financing needs for large projects can keep borrowing costs elevated across the economy, adding another channel through which AI spending can affect financial conditions. A cooldown could give the Fed more room to set policy without leaning as heavily on other parts of the economy, Lee said. Her comments concern a possible easing in investment-related pressure; they do not amount to a call for a particular interest-rate move. Lee's remarks followed mid-September declines in AI-linked stocks, including Nvidia, AMD, Intel, Meta and Alphabet. The selloffs coincided with unexpected increases in inflation and Treasury yields, raising questions among analysts about whether the current pace of AI investment can continue. The issue echoes TokenPost's earlier [coverage of AI debt financing above $500 billion](), which examined how a pullback in spending could affect inflation and Fed flexibility. Lee distinguished a moderation in spending from a collapse in demand. She said labor shortages and a growing need for automation continue to support longer-term demand for AI infrastructure, even if investment growth cools. Spending patterns at major chipmakers and hyperscalers, upcoming inflation readings and Treasury yields are signals to watch. Those indicators could help show how AI investment and broader cost pressures are developing. ## Links in this article - [coverage of AI debt financing above $500 billion](https://www.tokenpost.com/news/investing/42329)