Fed’s Mary Daly says the AI pipeline will keep flowing, even if it slows

Daly’s comments come as investors reassess how much money is flowing into AI infrastructure. She said the recent repricing of AI demand is painful but orderly, signaling that the Fed does not see it as a systemic threat.

The San Francisco Fed president told CNBC that AI demand growth may be slowing, not collapsing. She pointed to signals suggesting demand “might come down a little,” a more cautious stance than she held a month earlier.

In an October interview with Axios, Daly had said it didn’t seem like AI demand was decreasing. She then treated recent pressure on technology prices as a temporary shock, but her November remarks reflect a more nuanced update.

Daly also flagged something unusual about current price pressures in chips and tech. She said those pressures look less like a one-off shock than such pressures typically do, which could keep the Fed focused on inflation.

The central banker remains cautious about both the timing and the size of AI’s productivity effects. She has suggested AI could have deflationary effects over a horizon of 5-10 years, but she does not expect that to shape monetary policy right now.

Daly’s chip-price observation may be the detail worth watching most closely. If tech input costs prove persistent rather than temporary, they could keep pressure on the Fed to stay restrictive longer than markets would like.

Her comments land as the Fed weighs whether to tighten further, following recent job report data. That comment fed expectations for additional moves aimed at bringing inflation down.

The next checkpoint is close. Daly is scheduled to deliver a keynote at Stanford’s SIEPR Fall Policy Forum on November 12, 2026, focused on what AI means for economic policy.