The rapid advancement of artificial intelligence (AI) has sparked excitement, but it also raises concerns about potential "black swan" events. Companies are investing billions in the sector, stock markets continue to rise, and the Federal Reserve appears poised to cut interest rates and end quantitative tightening. With robust U.S. GDP growth, tariffs having a milder-than-expected impact on inflation, and energy prices remaining relatively low, fears of a recession seem distant. However, financial analyst Eugenio Catone warns of a looming black swan event tied to AI, supported by two key charts.

The first chart compares gold prices (green line) with the 10-year U.S. Treasury yield (blue line), showing that gold often predicts yield movements two years in advance. While analysts debate how much the Fed will cut rates in upcoming meetings, no one anticipates a reversal. With inflation stabilizing, aggressive hawkish policies akin to 2022 seem unlikely—making any shift a potential black swan event.

The second chart draws parallels between current inflation trends and the 1970s–80s, when inflation resurged stronger and longer after an initial decline. Catone identifies four drivers for a possible second wave: 1. **Tariffs**: Their full inflationary impact may take longer to materialize. 2. **Fed Policy Mistakes**: Despite strong GDP growth, rate cuts are planned. A post-Powell Fed (post-May 2026) might align more closely with political priorities. 3. **Geopolitics**: Ongoing tensions, particularly involving Russia, could spike energy commodity prices. 4. **AI Infrastructure**: Massive investments in data centers—whose energy demands are poorly understood—could raise overall energy costs and fuel inflation.

**AI’s Energy Hunger** U.S. electricity demand plateaued from 2005–2020 but is now surging due to AI adoption. The International Energy Agency (IEA) estimates data centers consumed 415 terawatt-hours (1.5% of global demand) in 2024, projected to hit 945 TWh (3%) by 2030. While 3% seems modest, forecasting errors and grid limitations could amplify the strain.

**Infrastructure Strain** U.S. utilities, unable to meet AI-driven demand with existing grids, are passing upgrade costs to consumers. PJM Interconnection’s capacity auction prices soared from $34/MW-day (2023–24) to $269/MW-day (2025–26), reflecting this pressure. Higher electricity costs, though not recessionary alone, compound economic risks.

**Oil’s Role** Data centers rely heavily on natural gas, with demand rising through 2030. Renewables and nuclear can’t yet replace fossils, making oil—historically stable but poised for volatility—a critical variable. A doubling of oil prices could trigger a second inflation wave, forcing the Fed to hike rates and destabilizing markets.

**Conclusion** While AI fuels market highs, gold’s predictive link to Treasury yields suggests a less rosy 2026. Energy costs—driven by AI’s power needs—could lift rates unexpectedly. Combined with tariffs, rate cuts, and geopolitics, a black swan inflation surge remains plausible, yet unpriced by markets.