Cleveland Fed's Hammack Says AI Is Fueling Inflation, Rate Hikes May Be Needed
- Cleveland Fed President Beth Hammack warned that demand from AI infrastructure such as data centers is adding to price pressures, and that the Fed may need to raise rates if inflation doesn't moderate (CNBC).
- She noted inflation has stayed 'too high for the past five years' and that current policy may not be sufficiently restrictive, keeping an open mind on next moves.
- Her hawkish comments land a day after Citadel Securities (ID 41) warned markets are underpricing a Warsh-led Fed, reinforcing the rate-hike narrative as the S&P 500 wraps its best quarter since 2020.