Rubbish Check
Forbes Business · 29 August 2026
source R3/ 10
Lightly altered
Rubbish Rating — 1 = base fact, 10 = pure rubbish
12345678910
In short
Rubbish Talk rates Forbes' claim that AI demand is "driving up prices as much as tariffs" a 3/10 because the Minneapolis Fed's own analysis puts AI-driven hardware inflation at roughly 0.4 percentage points of core PCE, matching only the upper end of its 0.2 to 0.4 point tariff estimate, not a clean like-for-like tie.
The Verdict
Lightly altered. The headline compresses a range into a single equivalence: the Fed says tariffs add 0.2 to 0.4 points and AI adds "roughly" 0.4, so the two are only exactly equal at the top of the tariff range. That's a defensible headline shorthand for a real Fed finding, not a distortion of it, so this stays close to base fact.
What actually happened #
A Minneapolis Fed analysis found that surging AI-driven demand for memory chips and computer hardware has pushed core inflation up by roughly the same amount as Trump-era tariffs. Both forces are contributing to core PCE inflation running well above the Fed's 2% target, with tariffs still working through the pipeline and AI hardware costs already showing up sharply in consumer electronics prices.
Key facts #
- Tariffs account for 0.2 to 0.4 percentage points of core PCE inflation as of July, per the Minneapolis Fed analysis.
- AI-driven hardware demand adds roughly 0.4 percentage points to core PCE, via a 12.2% year-over-year surge in video and information processing equipment prices.
- Core PCE inflation hit 3.3% year-over-year through July, the highest reading since 2023 and, pandemic aside, since the early 1990s.
- Video and information processing equipment prices fell at a 6.5% annual rate from 2015 to 2019, making the 12.2% jump a sharp reversal.
- The Fed's researchers said core PCE would still sit roughly one percentage point above target even with tariffs stripped out entirely, a caveat that undercuts a simple "tariffs vs AI" binary.
- A separate, earlier Minneapolis Fed note found realized tariffs adding 2 percentage points to core goods inflation, equivalent to an additional 0.5 percentage points to core PCE inflation, showing the Fed's own tariff-contribution estimates have moved as more data arrived.
What to watch for #
Tariff pass-through is described as still incomplete, with sectors like new cars not yet fully repricing, so the tariff share of core PCE could climb in coming months. Watch whether the Fed's own tariff-contribution number keeps shifting between reports; the same Fed system's earlier estimates ranged higher (0.5 to 0.8 points), so a moving denominator deserves scrutiny before treating any single month's split as settled.
About this scoreThe R-Score is Rubbish Talk's editorial opinion on how far a headline's framing sits from what the underlying facts support. It is a judgement about presentation and emphasis, not an allegation that any outlet has acted dishonestly. Every figure we rely on is linked under Receipts so you can check it yourself.