Chicago Fed President Goolsby: AI investment boom drives up inflation, affects path to rate cuts

Chicago Fed President Goolsby stated that the price pressure brought about by the investment boom in artificial intelligence (AI) is spreading from the data center sector to the US economy, exacerbating inflation risks. Gulsby pointed out that the construction of AI infrastructure has led to a surge in demand for electricity, buildings, land, and equipment, driving up costs in multiple industries. If inflationary pressures persist, the Federal Reserve will need to maintain a longer period of tight monetary policy, even raising interest rates. Gulsby said that this belongs to the traditional concept of overheated demand.