Federal Reserve Bank of Chicago President and CEO Austan Goolsbee said the U.S. economy remains stable but is edging toward overheating, while inflation has worsened after two years of progress. He said continued consumer spending, rather than AI data-center construction, has been the main support for growth, with a household pullback posing the biggest risk. Goolsbee described data-center expansion as very hot because companies are competing for construction workers, heating and cooling equipment and other resources. He warned that broader overheating could develop if the build-out pushes up services inflation. Goolsbee said low hiring is not predominantly caused by AI, even though adoption has pressured some sectors. The Federal Open Market Committee must weigh temporary supply shocks against the risk of persistent above-target inflation. July consumer prices rose 0.1% after falling 0.4% in June, while prices were 3.4% higher than a year earlier. Goolsbee said unexpected AI productivity gains could lower inflation and interest rates, but heavy anticipation and investment could lift equity values, spending and near-term inflation before productivity arrives. A Federal Reserve research note found stronger productivity growth in more AI-exposed industries, while broader differences across organizations remained limited. Nvidia CEO Jensen Huang has urged faster AI infrastructure development, and President Donald Trump has promoted data-center expansion, underscoring the policy debate over AI’s economic benefits and risks.