Honey, AI Capex is Eating the Economy

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AI capex is so big that it's affecting economic statistics, boosting the economy, and beginning to approach the railroad boom As ever, here is what's ahead: I previously wrote about the perils of building renovation as a Fed chair, especially given an administration bent on finding a reason to fire you "for cause." As anyone who has renovated anything larger than a dog house knows, no one thinks what you spent on renovation makes sense, not even you. Most spouses wish they could fire someone for cause over most renovations. In that light, this WSJ explainer of the ongoing Federal Reserve renovations is useful reading as various administration officials feign dismay at someone renovating a building that hasn't been renovated in ... ever. Shocked, I am shocked to find renovations going on in here. Say what you will about Powell's monetary policy, either that wallpaper doesn't go¹, or Powell does, apparently. ¹ Writer Oscar Wilde's final words may or may not have been: "This wallpaper and

Jul 18, 2025 5 min read Newsletters AI capex is so big that it's affecting economic statistics, boosting the economy, and beginning to approach the railroad boom Paul Kedrosky As ever, here is what's ahead: Updates on prior pieces My most recent Rough Notes essay A few things worth reading Updates & Erasures: I previously wrote about the perils of building renovation as a Fed chair, especially given an administration bent on finding a reason to fire you "for cause." As anyone who has renovated anything larger than a dog house knows, no one thinks what you spent on renovation makes…

Honey, AI Capex is Eating the Economy

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