SF Fed president: AI demand could extend energy shock

Mary Daly, president of the Federal Reserve Bank of San Francisco, warns that the surge in demand for chips driven by artificial intelligence could prolong energy-related price shocks, potentially keeping inflation higher than anticipated. Unlike typical supply shocks, AI demand, coupled with tariffs and rising energy costs, might not fade quickly, necessitating ongoing monetary policy adjustments. This insight underscores the complex interplay between technological advancements, global trade policies, and economic stability.