Minutes of the Federal Reserve meeting reveal internal divisions, with uncertain prospects for inflation and interest rates.

The Federal Reserve ended its two-day monetary policy meeting on June 17th, announcing that it would keep the federal funds rate target range unchanged at 3.5% to 3.75%. On July 8th, the Federal Reserve released the minutes of the June monetary policy meeting, which showed that there were clear differences among Fed officials regarding the US inflation outlook and future monetary policy direction. The minutes revealed that many Fed officials noted a further increase in inflation, which is still well above the long-term target of 2%, but there was disagreement on the inflation outlook. Some officials stated that price pressures have become more widespread, with significant increases in prices of many goods and services. Others believe that the slowdown in housing-related services price increases could gradually ease inflation pressures. Additionally, the minutes focused on the impact of artificial intelligence on inflation. Some officials believe that the continued strong demand for artificial intelligence could lead to sustained increases in prices of technology products and electricity. However, others argue that the productivity gains from AI applications will ultimately lower production costs, increase total supply, and lead to lower inflation. The minutes also noted that there is significant uncertainty in this economic forecast, mainly due to uncertainty in the situation in the Middle East and the potential impact of AI investment and industry on the economy. While officials at the meeting agreed to keep rates unchanged, there were differing views on the future direction of monetary policy. Some officials believed that with a stable US job market and high inflation, the Fed needs to moderately tighten monetary policy to achieve its inflation target. Others believed that rates should remain at or slightly below current levels by the end of the year. Economist Roch from the well-known US financial firm LPL stated that the minutes contain some ambiguous content, indicating competing views within the Fed on policy issues.