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

Mary Daly has a message for anyone treating the recent tech wobble as AI’s last call: the pipeline is deep, and it is not drying up.

The President of the San Francisco Federal Reserve Bank said the AI pipeline will keep going even if the pace eases. That is a notable stance from a central banker, because the Fed is still focused on inflation and is weighing whether to tighten further.

In a November 6, 2026 interview with CNBC, Daly described the recent repricing of AI demand as painful. She also stressed that it has played out in an orderly way.

What Daly actually said

Daly’s core point is that AI demand growth may be cooling, not collapsing. She pointed to signals suggesting demand “might come down a little.”

On the policy side, Daly indicated that recent job report data leaves room for the Fed to tighten further. That comment fed expectations for additional moves aimed at bringing inflation down.

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.

She has also urged watching detailed, granular data on AI rather than leaning on headline aggregate statistics. Daly remains cautious about both the timing and the size of AI’s productivity effects.

How her view has shifted since October

A month earlier, Daly sounded more confident about AI demand. In an October 6, 2026 interview with Axios, she said it didn’t seem like AI demand was decreasing.

At that point, she treated recent pressure on technology prices as a temporary shock. The November remarks read as a more nuanced update rather than a reversal.

Her October take was essentially that demand keeps growing and price pressures will pass. Her November take is that demand may grow a bit more slowly, and some of those price pressures could be stickier than expected.

Daly has also offered a longer-horizon view of how AI interacts with prices. She has suggested AI could have deflationary effects over a horizon of 5-10 years.

That potential deflationary force, however, is not something she expects to shape monetary policy right now. In her view, AI does not currently pose a pressing near-term inflationary threat either.

Why this matters for markets and the Fed

Daly’s comments land as investors reassess how much money is flowing into AI infrastructure. Those reassessments, along with ongoing inflation concerns, continue to factor into the Fed’s thinking.

By describing the AI repricing as orderly, Daly signals that the Fed doesn’t see it as a systemic threat. That gives the central bank room to keep its focus on inflation rather than on rescuing markets.

Her 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.

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.