Kevin Warsh is treating more expensive borrowing as evidence his policy is working without explaining how much it’s doing about the inflation from AI spending. He held because he thinks the September hike is already making borrowing more expensive. Most of that is coming from AI and AI investment is what’s speeding up the growth he says is strong. So higher borrowing costs should slow AI spending. Two weeks ago he said that spending was pushing inflation up. Slowing that spending should bring some of that inflation down. But how much are higher borrowing costs actually doing to bring it down? Productivity improving for a couple of years doesn’t answer that.