One signal

Federal Reserve Bank of Chicago president Austan Goolsbee says the AI data-centre buildout is starting to look like a demand shock, as companies compete for land, labour, utilities and materials. He made the argument at a Chicago event on Monday, according to American Banker.

The distinction matters: a demand shock can put upward pressure on prices, unlike a productivity boost that expands supply. Goolsbee did not call for a specific rate move, but he warned that central banks may need to respond firmly if overheating takes hold. Goolsbee is not a Federal Open Market Committee voter this year, but is due to vote next year. His view is one official’s assessment, not a settled verdict on AI’s economic effects.

Discuss: Should central banks treat the AI infrastructure buildout as a near-term inflation risk, or give it more time to deliver productivity gains?

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