Cleveland Federal Reserve President Beth Hammack warned Tuesday that surging demand for artificial intelligence infrastructure is acting as a persistent tailwind for inflation, suggesting the central bank may need to raise interest rates if price pressures fail to subside.
Hammack told CNBC that inflation has remained "too high" for the past five years, pointing to the "insatiable" appetite for AI hardware and data centers as a key structural driver keeping prices elevated.
Her comments mark a notable shift in tone, explicitly linking the tech sector's capital expenditure boom to broader macroeconomic stability concerns.
The remarks add to a growing chorus of hawkish voices within the Federal Reserve.
Minneapolis Fed President Neel Kashkari recently signaled that a rate increase could be warranted in 2026, marking a significant departure from the previous consensus that policy easing was the only path forward.
Together, these comments suggest a faction of policymakers is increasingly prepared to tighten policy if inflation proves sticky.