Wall Street Journal 2026-05-09-1
AI Is Distorting Practically Everything About the Economy
The Mag-7 aren't leading the economy; they're substituting for it. Strip out tech equipment, software, and data-center construction, and Q1 GDP growth was effectively flat — Tedeschi's import-netting cuts AI's headline contribution from 1.7pp to 0.4pp, with the remainder leaking to Taiwan and Korea. That makes the Fed's reaction function structurally late: the number it's reading is real, but what it's measuring isn't.