According to Fed Governor Michelle Bowman, who spoke at the Council on Foreign Relations on Tuesday (November 10), disappointing AI investment returns could trigger significant stock valuation corrections and rising private long-term interest rates. Bowman suggested she may support a rate hike at the Fed's December meeting, citing persistent inflation pressures and a strengthening labor market. She stated that stock price declines could weaken consumer spending resilience, while rising rates could further stress interest-rate-sensitive sectors such as housing and small business investment. Bowman also expressed concern about rapid growth in AI-related debt, which could exceed $800 billion this year through corporate bonds, private credit, and project financing.

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