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Powell: Data-Center Boom Fuels Inflation, Energy Costs Rise

3/20/2026

Summary

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Federal Reserve Chair Jerome Powell said rapid data-center expansion is contributing to inflation.
He noted demand for data-center materials and services is outpacing productivity gains, raising inflation and energy costs.
Goldman Sachs forecasts a 6% rise in consumer electricity prices from 2026 to 2027 because of this strain.
Powell said he remains uncertain about the long-term economic implications of generative AI, noting ongoing debate about demand versus supply.

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Story summary

Federal Reserve Chair Jerome Powell said rapid data-center expansion is contributing to inflation.
He noted demand for data-center materials and services is outpacing productivity gains, raising inflation and energy costs.
Goldman Sachs forecasts a 6% rise in consumer electricity prices from 2026 to 2027 because of this strain.
Powell said he remains uncertain about the long-term economic implications of generative AI, noting ongoing debate about demand versus supply.