San Francisco Fed President Mary Daly said demand tied to the AI boom could spread beyond high-end AI chips into the broader semiconductor market, with some companies already moving to secure memory chip supply in advance and redesign products to use fewer chips. She said the price pressure linked to AI may not be a one-off shock and could take longer to ease than the Federal Reserve’s usual one- to three-year assumption. Daly also said she fully supported the Fed’s September rate hike. Whether additional action is needed, she said, will depend on whether shocks tied to AI, tariffs and energy prices lifted by the Middle East conflict fade. If those forces last longer or stack on top of one another, the Fed may need to tighten policy further. If they prove temporary, more rate hikes may not be necessary.
San Francisco Federal Reserve President Mary Daly said demand driven by the AI boom could spread from high-end AI chips into the broader semiconductor market, according to BlockBeats on Oct. 7.
Daly said some companies have already started locking in memory chip supply ahead of time. Some are also redesigning products to reduce chip usage.
She said the price pressure created by this wave of AI demand may not be a one-time shock, and the time needed for it to ease could exceed the Federal Reserve’s usual one- to three-year assumption.
Daly also said she fully supported the Fed’s September rate hike. Whether further action is needed will depend on whether shocks tied to AI, tariffs and energy prices pushed up by the Middle East conflict begin to fade.
If those factors last longer or overlap with each other, further policy tightening may be needed. If the shocks are only temporary, additional rate hikes may not be necessary.
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