Fed's Kashkari says he's skeptical AI is replacing workers, but it may push up rates

By Ann Saphir

(Reuters) -Federal Reserve Bank of Minneapolis President Neel Kashkari on Tuesday said that while he doesn’t believe artificial intelligence will quickly replace U.S. workers, massive investment in AI data centers will tend to drive borrowing costs higher, even if the Fed reduces its short-term policy rate.

President Donald Trump has pushed for the Fed to lower interest rates in part to help make housing more affordable, and recently appointed a new Fed governor who says Trump’s immigration crackdown is already driving rent inflation down and is calling for massive rate cuts.

“Even if the Fed embarks on one or more interest rate cuts, it may not translate into lower mortgage rates because the capital that would have been building homes or apartment buildings is being diver