The AI boom is not sensitive to interest rate changes. Even with rising financing costs, related investments continue to expand rapidly, constantly siphoning away funds, electricity, and labor that might otherwise flow to the real estate and automotive industries, creating an economic effect similar to "Dutch Disease." Because monetary policy cannot address this resource allocation imbalance, the Federal Reserve is caught in a dilemma, forced to maintain interest rates at higher levels for an extended period. The real solution to this problem is to expand supply. (Apollo Global Management)
Note: "Dutch Disease" refers to the economic phenomenon where the rapid prosperity of one industry attracts a large amount of capital and labor, leading to resource drain and decreased competitiveness in other industries.
