BlockBeats report, on May 12, the U.S. April CPI rose year-over-year to 3.8%, reaching its highest level in three years. Several economists have warned that this round of inflation is no longer just an "energy crisis," but a systemic cost shock triggered by the Iran war and the expansion of AI infrastructure.
Data shows that U.S. gasoline prices rose 28.4% year-over-year, while fuel prices surged 54.3% year-over-year. Meanwhile, food prices increased 0.7% month-over-month in April, and electricity prices rose 2.1% in a single month.
KPMG Chief Economist Diane Swonk said this round of disruption is more dangerous than during the Russia-Ukraine conflict, as the issues are now spreading broadly across supply chains. She noted that diesel shortages are driving up costs in agriculture, logistics, and shipping, while the construction of AI data centers is creating new pressures on chip, helium, and power supplies. “This is no longer just an energy issue—it’s a supply chain crisis.”
Reports indicate that AI infrastructure development is driving up demand for memory chips and continuously increasing power consumption in data centers, while opposition to large data center projects is growing among some state and local governments. Meanwhile, U.S. residents' real incomes are beginning to be eroded by inflation. Analysts believe the Federal Reserve is now trapped in an "unsolvable situation":
Further interest rate hikes will further strain the already weakening job market;
If interest rates are cut or kept accommodative, it could lead to more prolonged and persistent inflation.
Kevin Warsh, a leading candidate to succeed Jerome Powell as Fed chair, is expected to face an exceptionally challenging policy environment.