AI infrastructure boom adds to US inflation risks, warns former Fed’s Evans

Charles Evans, former president of the Chicago Federal Reserve, has raised concerns that the ongoing boom in AI infrastructure investment could further heighten inflation risks in the U.S. economy. According to Evans, the increased demand for construction, equipment, energy, and labor driven by AI advancements may encourage the Federal Reserve to consider additional interest rate hikes. His comments come amidst a backdrop of rising inflation, with the U.S. Consumer Price Index (CPI) climbing 3.7% year-over-year in September, surpassing the Fed’s target of 2%. The Federal Reserve’s upcoming statements and economic data releases will be crucial in determining the likelihood of additional rate hikes in 2026. Market participants will closely monitor any shifts in tone from key Fed officials, particularly regarding inflation and economic growth.

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