New York Fed President John Williams stated that the supply of AI equipment may take over two years to meet current demand. This imbalance is driving up costs for chips and related hardware, which could contribute to inflationary pressures in the US economy.
During a Bloomberg interview, Williams noted that the Federal Reserve might implement one additional interest rate hike this year to combat inflation. However, he expressed uncertainty regarding further policy tightening in 2027, suggesting no current reason to believe additional measures will be necessary.
Despite potential rate increases, Williams anticipates that AI investment will remain robust. He observed that investors in the sector appear relatively insensitive to price changes, driven by expectations of significant productivity gains and transformative economic shifts.
The ongoing shortage of AI hardware may affect Bitcoin miners attempting to expand into the AI sector, as they compete for limited chip and power equipment. IREN secured $2.8 billion in new AI cloud contracts in July, while miners face rising financing hurdles.
