Fed Beige Book puts data centers at center of US growth

Investment in AI has become an anchor for the world’s biggest economy, a trend which has now been noted by the Fed in its own evaluation of local economic activity.

According to the Beige Book published on September 2, the Fed reported that U.S. economic activity showed only slight uptick in activity until the end of August, while consistently emphasizing the importance of data centers and AI for the overall demand when other segments of the economy have been slowing down.

This is of great significance beyond Washington. The various hyperscalers that are financing the expansion of data centers, such as Amazon and Microsoft, are setting the trend in the world concerning capacity for AI.

If the money, spent on building data centers is helping boost manufacturing and construction in the U.S. economy, the investors have one more reason to regard the AI surge as an economic phenomenon rather than just a tech-sector trend.

What the Beige Book actually flagged

According to the report, which Reuters said includes qualitative readings from all the twelve Federal Reserve regional banks, there has been only a minor increase in employment and moderate increase in prices, based on the available information up to August 24. Businesses expressed cautiousness and cited higher energy costs, uncertainty pertaining to policies, and international conflicts.

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