Chicago Fed President Goolsbee said US inflation is at a "dangerous moment"
after October CPI surprised to the upside, marking a second consecutive monthly
increase. He had expected inflation to ease as tariff effects faded and oil
fell, but that has not yet occurred. Goolsbee flagged persistent price pressure
in services and healthcare that he says is unrelated to tariffs or oil. The Fed
is trying to separate supply-side shocks (tariffs, prolonged high oil) from
demand-side overheating tied to large-scale data-center construction. AI-related
inflation remains concentrated in AI, tech and related sectors and has not yet
broadened; the Fed is monitoring for spread. He warned that if data-center
driven demand overheating starts to affect the wider economy it would become a
problem. Proposals by newly elected Democratic governors to pause data-center
builds are not directly connected to the Fed's inflation work.
