Bloomberg Surveillance · Wednesday, September 2, 2026
Torsten Slocke explains that current interest rates are not restrictive for the AI sector due to the significantly high expected returns in AI investments. He points out that while rates may be restrictive for housing and auto sectors, the AI industry's potential profitability allows for higher borrowing costs, contributing to sustained economic growth.
“So that's why this discussion among A4MC members about is our star higher or lower, Is monetary policy restrictive at this level? Well, it's restrictive for the housing market and for the auto sector, but it's actually not restrictive for the AI sector.”
“And the expected returns from the hyperscalers, from the labs, from everyone in the AI are way, way above the Fed funds rate. So in simple economics, if the costs of borrowing the Fed funds rate, which is a little less than 4%, is dramatically lower than the 10, 20% that people expect to get in AI, that means that we still have plenty of room for rates to rise.”