AI infrastructure expansion threatens to prolong inflation and complicate Fed rate decisions, the San Francisco Fed president warns.

Axios reported that AI demand could extend an energy shock, according to the article.

High interest rates are not slowing the AI technology boom, which poses a problem for the Fed.

Energy demand is surging to power next-generation computing facilities, the article notes.

Supply constraints on specialized hardware are creating persistent inflationary pressures.

Fed policymakers have added AI chip shortages to their list of inflation shocks, the article says.

Fed's Daly said the need for more rate hikes hinges on what happens with these shocks, Reuters reported.

Borrowing costs may need to stay elevated longer than markets expected, policymakers indicate.

Read the full article on how the AI boom is complicating the Fed's plans.