Fed's Daly: Further interest rate hikes may be needed if AI, tariffs, and energy shocks persist.
2026.10.07 07:45:02
San Francisco Federal Reserve President Mary Daly said that chip demand driven by the AI boom could spread from high-end AI chips to the broader semiconductor market, with some companies already starting to lock in memory chip supplies in advance and even redesigning products to reduce chip usage. She noted that the price pressure stemming from this AI-driven trend may not be a one-time shock, and the time needed to ease it could exceed the one to three years the Federal Reserve typically assumes. Daly added that she fully supports the Federal Reserve's September interest rate hike, and whether further action is needed will depend on whether shocks such as AI, tariffs, and energy prices pushed up by the Middle East conflict can subside. If these factors persist longer or overlap, further policy tightening may be required; however, if the shocks are only temporary, no additional rate hikes may be necessary.
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