A Fed official is signaling that raising rates to fight AI-driven price spikes would be a mistake, which is good news for stocks and anyone hoping the hiking cycle is nearly over.

• Chip, computer, and software prices have surged, but that pressure is squeezed into one sector rather than spread across the whole economy.
• The Fed's tools are too blunt to target one industry, so hiking against an AI supply crunch risks repeating Greenspan's over-tightening before the dot-com bust.
• Memory chip price forecasts already show growth slowing and turning negative as new supply comes online, which does the Fed's job for it.
• The bigger risks ahead look deflationary: AI gains going to the rich who don't spend, wages not keeping up, and workers needing retraining as jobs shift.
• Oil and the Iran conflict are the real inflation problem, not AI — markets are still priced for up to five more hikes.

Outlook: If an Iran deal lands and oil falls back, there is a real chance the Fed holds through October and skips further hikes entirely.