Goolsbee says AI data centers are overheating the economy — The Hill

Chicago Federal Reserve Bank President Austan Goolsbee said that the rapid construction of data centers for artificial intelligence systems is overheating the economy and increasing pressure on prices. He said this at a Leadership Greater Chicago event, The Hill reports.

Demand for resources

According to Goolsbee's assessment, the expansion of AI infrastructure is increasingly resembling a traditional overheating of demand. He stressed that such overheating does not disappear on its own, so central banks must act decisively at an early stage to prevent it from developing.

As of August, more than 1,500 data centers were under development across the country, Pew Research Center reported, citing Data Center Map. Federal Reserve officials also named the rapid deployment of AI infrastructure as one of the factors behind persistent inflation, alongside spikes in energy prices due to the war in Iran and President Donald Trump's tariffs.

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Inflation and rates

Federal Reserve Board Governor Lisa Cook noted in September that investments in data centers require construction labor and energy that are also used in other sectors of the economy. According to her, growing investment in AI may create price pressure in those industries as well.

Inflation stood at 3.7% in September according to the consumer price index. That same month, the Fed raised interest rates by 0.25 percentage points for the first time in more than three years. After keeping rates unchanged the previous month, traders put the probability of another 0.25-percentage-point increase in early December at 84.2%.