Fed Governor Cook cites data center spending as key factor delaying inflation’s return to 2%

Federal Reserve Governor Lisa D. Cook has pointed directly at the AI boom’s insatiable appetite for physical infrastructure as a major reason inflation remains stubbornly above the central bank’s 2% target. In a speech delivered on September 28, Cook laid out a detailed case that data center construction and semiconductor demand are creating broad price pressures across the economy, not just in the tech sector. The timing matters. Cook’s remarks came alongside a unanimous FOMC decision to raise interest rates by 25 basis points, a signal that the Fed sees enough persistent inflation to justify tightening further even as the economy absorbs the largest wave of capital spending in a generation. The AI spending boom meets stubborn prices Cook’s core argument is straightforward: roughly $2 trillion in AI-related capital expenditure has been announced, but only a small fraction has actually been deployed. That means the inflationary impulse from this investment wave isn’t close to peaking. The spending is pushing prices higher across multiple categories simultaneously. Semiconductors, computers, software, construction labor, and energy resources have all seen price increases tied to AI-...