Goolsbee warns AI data-center expansion may add to inflation pressures

AI · First reported 9 Nov, 17:30 · Updated 18:31

Image: Wikimedia Commons · Rekia1991 · CC BY-SA 4.0

Chicago Fed President Austan Goolsbee said the rapid data-center buildout resembles demand overheating and may add to inflation, while describing consumer spending as the main driver of growth. He also said AI could support stronger productivity over the longer term.

Goolsbee said rising costs for land, electricity, chips and construction, alongside difficulty hiring skilled workers, point to capacity constraints in the data-center expansion.
He said inflation remains his main concern, with price increases appearing in services less directly affected by tariffs and oil; he did not specify an interest-rate move.
Goolsbee said consumer spending has driven growth, while faster productivity—including potential gains from AI—could support higher wages over time.

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Key facts

Speaker: Austan Goolsbee, president of the Federal Reserve Bank of Chicago.
Main growth driver: Goolsbee said broad-based consumer spending has driven economic growth.
Productivity trend cited: He said productivity growth had run at roughly 2.5%, versus 1.5% before the pandemic, over the past two years.
Long-term horizon: Goolsbee said sustaining faster productivity growth for 15 to 20 years could raise incomes and support higher wages.