In March 2026, Jerome Powell, the Federal Reserve Chairman, addressed the influence of data centers on inflation during a press conference after the Fed's decision to maintain interest rates. Powell described the ongoing construction of data centers across the country, stating this extensive buildout is impacting the costs of related goods and services. The pressure on the supply chain has led to rising consumer electricity prices. Analysts, including Goldman Sachs, have predicted a significant 6% increase in these prices between 2026 and 2027, attributed to the demands of data centers on the power grid. Statistics indicate that utilities are seeking record rate increases to meet these energy demands, which have disproportionately impacted lower-income households. Furthermore, Powell emphasized that, while AI may ultimately provide disinflationary benefits, such effects are largely theoretical at this stage as infrastructure development struggles to keep pace with soaring demand. Only about a third of data center projects are currently active, indicating a bottleneck that complicates future growth. As a result, Powell highlighted that the Federal Reserve must proceed cautiously, as the potential increase in productivity from generative AI is yet to manifest meaningfully. Evaluating the interaction between demand and supply remains a complex situation, with Powell admitting uncertainty about the long-term implications for interest rates and inflation.