Overview
- Federal Reserve Governor Lisa Cook said on Oct. 1, 2026 that the AI buildout is a top risk for 2027 and warned the resulting inflationary pressures may not resolve quickly, and she supported last month’s unanimous 25 basis-point rate increase.
- New York Fed President John C. Williams described AI as a “race between available supply and surging demand” and said AI capital spending runs in the hundreds of billions of dollars a year while materially supporting growth.
- Williams presented a conditional inflation path that shows about 3.5% for 2026, a move to just above 2% in 2027, and a return to the Fed’s 2% target by 2028 only if energy stabilizes and AI supply and demand come into balance.
- Officials stressed that the main drivers are shortages of chips, power and data-center inputs that central-bank tools cannot directly fix, and they cautioned that expected productivity gains from AI may take substantial time to reduce price pressures.
- Policymakers said much AI hardware spending is import-dependent, which limits its boost to U.S. GDP, and they flagged energy costs and future supply bottlenecks as the key things to watch that could extend higher prices for businesses and consumers.