Federal Reserve warns AI‑driven inflation amid split on future rate moves

The U.S. Federal Reserve released minutes from its June policy meeting, showing a clear division among officials over the inflation outlook. Half of the participants favored another rate hike, while the other half preferred holding rates steady, and the minutes omitted language suggesting future cuts. The document highlighted concerns that growing artificial‑intelligence infrastructure—data‑center electricity use, semiconductor and computer‑equipment demand—could lift prices, adding to higher consumer‑inflation expectations that have risen to near three‑year highs.

New York Fed President John Williams told Bloomberg that AI‑related demand is his top inflation worry. He warned that if AI‑driven price pressures persist, the Fed may need to raise rates again. Williams said the current policy stance remains appropriate as long as core personal‑consumption‑expenditures growth stays near his benchmark of 0.2% per month in the second half of 2026.