Fed’s Williams sees AI supply squeeze lasting beyond 2 years
Markets
Published: Oct 14, 2026
New York Fed President John Williams expressed his view during an interview with Bloomberg on Tuesday that the demand for AI equipment continues to surge, leading to a significant increase in chip prices and the cost of goods reliant on these technologies. He believes the global AI supply chain will take more than two years to catch up with the current demand, potentially exacerbating inflationary pressures.
"I think it’s going to take longer. Assuming the demand kind of impulse continues as expected, and that’s a big assumption."
Williams reaffirmed the Federal Reserve's position on raising interest rates this year to combat inflation.
"I haven’t changed my view that it may be appropriate to have one more rate hike."
Despite the potential economic slowdown, Williams predicted sustained AI investment, stating that investors remain steadfast in their belief in AI's transformative potential.
"I think investors there are relatively price insensitive. They feel that this is a huge, going to lead to huge productivity gains, huge transformative changes in our economy, and I think that happens not completely invariant to interest rates, but I don’t expect monetary policy to be really having a deep effect on that."
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AI Supply Chain: The text highlights the current shortage in AI equipment supply, impacting Bitcoin miners expanding into AI-driven projects.
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Bitcoin Mining: Miners face challenges in securing chips and power equipment due to the AI equipment supply shortage.
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Crypto and AI: Williams' comments reflect broader industry sentiments about the ongoing convergence of AI and cryptocurrency.
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