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At the Council on Foreign Relations in Washington on Tuesday, November 10, 2026, Fed Vice Chair for Supervision Michelle Bowman said AI-related price pressures accounted for about one-fourth of above-target core PCE inflation over the 12 months ending in September. Tariffs and energy each accounted for a similar share. Core PCE is the Fed’s preferred inflation gauge, and it leaves out food and energy prices.
The share is Bowman’s own estimate. The Fed has published no such statistic. She added that 12-month core PCE likely rose to 3.3% in October, and the October consumer price index rose 0.4%, which was above the consensus forecast.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) closed Tuesday at $168.89, down 5.47%. It traded at $177.46 around 1:32 p.m. ET on November 11, up 5.07%, as a CoreWeave (NASDAQ:CRWV)-led rally lifted AI cloud stocks. Microsoft (NASDAQ:MSFT) traded at $521.28, down 2.23%. Neither move can be clearly linked to her speech. The spending that drives both companies’ growth now sits on the Fed’s inflation list.
Why Rate Hikes Barely Touch AI Inflation
Bowman said the AI expansion pushed investment demand toward high-tech equipment whose supply can’t expand quickly. Prices for memory chips, semiconductors, and computers rose by double digits, and she said monetary policy has limited influence over them.
That shortage helps NVIDIA. On its August earnings call, the chief executive said, “Even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%.”
Microsoft is on the paying side. Its quarterly capital spending reached $39.367 billion, and roughly three-quarters of that went to short-lived assets such as GPUs and costlier memory.
A Financing Web on the Fed’s Radar
Bowman said AI-related debt is on track to exceed $800 billion in 2026. She estimated that leases, contract commitments and residual value guarantees could add more than three times that amount. By our own math, her two figures imply more than $2.4 trillion.
She also said hyperscalers’ equity stakes in smaller customers create “the appearance of circular financing.” NVIDIA fits that description, because its guarantee obligations are limited to $108.5 billion and it has invested nearly $50 billion in frontier AI labs.
Her downside scenario was conditional. If AI revenue falls short of rising costs, AI stocks could face a sharp correction and tighter credit.
What Bowman Left Out About December
She backed holding the target range at 3.75% to 4% in October and said policy is on no fixed course. She did not endorse a December hike, although Governor Christopher Waller and Dallas Fed President Lorie Logan argued for more increases on the same day.
Early on November 11, futures priced an 88.5% chance of a quarter-point hike and an 11.5% chance of a half-point move. She still expects core PCE to move closer to 2% next year.
How AI Stocks Stack Up Before a Possible December Hike
The bull case is that demand still exceeds supply. NVIDIA’s guidance points to $108.0 billion in third-quarter revenue, and Microsoft’s commercial backlog stands at $677 billion.
The bear case is that a hike raises borrowing costs for data center developers. A hike also brings down the present value of profits expected years from now, which matters most for growth stocks.
My view is that NVIDIA is better placed than Microsoft under the pressures Bowman described. It collects the price increases Bowman described, and it trades at 34 times earnings after a -22.6% month. Microsoft trades at 30 times earnings and pays those higher prices.
NVIDIA’s earnings report is expected on November 17, although the company has not confirmed the date. If revenue misses the $108.0 billion guide by more than its 2% band, this view is wrong. The FOMC then meets on December 8-9.
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