Fed’s Williams sees AI supply squeeze lasting beyond 2 years

New York Fed President John Williams’ comments came as he reaffirmed his view that the US Federal Reserve may need to raise interest rates once more this year.

New York Fed President John Williams said AI equipment supply could take more than two years to catch up with demand, which could add to inflationary pressure.

Williams made the comments during an interview with Bloomberg on Tuesday, saying that the buildout of AI infrastructure is pushing up chip prices and goods that use them.

Asked whether supply and demand within AI would become more balanced over the next two years, Williams said: “I think it’s going to take longer. Assuming the demand kind of impulse continues as expected, and that’s a big assumption.”

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