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Chicago Federal Reserve Bank President Austan Goolsbee stated that inflation driven by the artificial intelligence boom is spreading beyond data center components into unrelated sectors, raising concerns about broader economic overheating.
Speaking on Semafor's Compound Interest, Goolsbee noted that prices for land, electricity, water, and construction have surged, and he is "increasingly nervous" that this represents "straight, old-fashioned overheating demand." The Federal Reserve faces a complex challenge as it weighs whether current inflation is driven by external supply shocks or domestic demand.
Inflation stood at 3.4% in August, with September figures due for release this week.
Goolsbee, who will join the Federal Open Market Committee in 2027, distinguished between inflation caused by Middle East conflicts affecting oil prices and inflation stemming from hotter demand for goods and services.
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