Data: BIS ; Chart: Danielle Alberti/Axios Today's AI buildout resembles earlier technological revolutions and capital booms that ended in painful busts. - That's the new warning from the Bank for International Settlements, a top forum known as the "central bank for central banks." Why it matters: The technological revolutions that transform the economy have a long history of attracting more investment than what near-term returns justify. - The risk is that AI follows the same pattern at a moment when the global economy is unusually reliant on a single investment boom to keep the expansion on track. Flashback: Some of the world's greatest technological breakthroughs — canals, railroads, the internet — sparked enormous investment…
President Trump's immigration crackdown is causing one of the sharpest slowdowns in U.S. population growth in decades. Economists are beginning to tally the effects, with some warning that the damage will stick around. Why it matters: The policy-driven immigration reversal underway has few modern parallels. The immediate result is evident in monthly employment figures, with the economy cranking out fewer jobs. - But over time, fewer immigrants could be a productivity drag lasting well into the second half of this century. The intrigue: Federal Reserve analysis earlier this year found that the breakeven rate — the monthly job gains needed to hold unemployment steady — had dropped close to zero as an immigration slowdown weighed on…
The AI economy is being constrained by the physical world: The Iran war threatens to squeeze the industrial inputs that chip manufacturers depend on, the latest confirmation that once-reliable global chokepoints are now more fragile than ever. Why it matters: It is part of a growing pattern defining the economic conditions of the 2020s: shocks exposing the fragility of supply chains that the world took for granted. - The AI buildout is the latest to be throttled by this trend — in this case, the effects of an uncertain Middle East conflict and the Strait of Hormuz's effective closure. What they're saying: "Hyperscalers are committing roughly $650 billion to U.S. AI infrastructure this year alone. And that investment assumes the supply…
The Iran war 's economic consequences risk outlasting the conflict itself. Why it matters: Any swift ceasefire or arrangement allowing safe passage through the Strait of Hormuz won't undo supply shocks that could linger for months — and in some cases, years. What they're saying: Oil markets "have so far faced logistics disruptions, not true supply destruction," Matt Bauer, a commodity strategist at Ned Davis Research, wrote in a client note on Friday. - "But attacks on South Pars and Iran's retaliation raise the risk that the conflict is shifting toward physical damage of production capacity." "The direct attacks on energy infrastructure illustrate the war's long-lasting consequences," says Kyle Rodda, a senior financial market…