Key facts
- Goolsbee said the AI data center buildout "is, to my eyes, starting to look more just like old-fashioned demand overheating."
- Goolsbee said there is "no question" what central banks must do when such overheating occurs, without specifying a rate move.
- The remarks at a Leadership Greater Chicago event on November 9 followed warnings in September and October.
- Fed Governor Lisa Cook has described the AI buildout as primarily sectoral rather than aggregate, per Semafor.
- Goolsbee is not a voting FOMC member in 2026 and joins the rate-setting rotation in 2027, per the report.
Chicago Fed President Austan Goolsbee said on November 9 that the AI data center buildout "is, to my eyes, starting to look more just like old-fashioned demand overheating," according to remarks at the Leadership Greater Chicago "Economics: Are We Ready for Tomorrow?" Q&A. The Chicago Fed's speaking-engagements page confirmed the event, which was moderated by Subrina Hudson and livestreamed from the Chicago Fed's website. No prepared transcript had been posted as of publication time.
Goolsbee added there is "no question" what central banks must do when such overheating occurs, without specifying a rate move. The remarks complete a progression from his September 21 warning at an Official Monetary and Financial Institutions event in London, where he said AI construction activity was "spilling out of its own lane" and that any sign of aggregate overheating left "no ambiguity about how the Fed needs to respond," per Axios. In an interview first reported by Semafor on October 12, he said he was "getting increasingly nervous that that's just straight, old-fashioned overheating demand." A day later he sharpened the frame further: "This is starting to feel like aggregate overheating, that the AI data center cost increases are jumping out of its lane."
Fed Governor Lisa Cook has offered a contrasting read on the AI buildout, per Semafor, describing it as primarily sectoral rather than aggregate in nature. Goolsbee is not a voting FOMC member in 2026 per the Fed's current rotation; he joins the rate-setting rotation in 2027.
Goolsbee has noted that AI data center spending "doesn't have to be interest-rate sensitive." Hyperscalers financing buildouts through bond markets at scale will not stop breaking ground because the Fed raised rates another 25 basis points, the report said, while the companies absorbing higher borrowing costs in real time are small businesses, homebuyers, and anyone carrying floating-rate debt. Morgan Stanley has flagged a 32 GW power shortfall for U.S. data centers through 2028, and Wood Mackenzie estimates that 768 GW of data center power is involved, according to the report.