Warsh's First FOMC Minutes

The Federal Reserve released Warsh's first monetary policy meeting minutes in the early hours, which contained several important signals.

First, they listed AI investment as a significant source of inflation for the first time. They believe that AI investments such as data center construction and computing power will bring sustained pressure to inflation.

Second, the internal attitude of the Fed has changed significantly compared to March. The number of people expecting a rate hike this year increased from 0 last time to 9, while only 1 person expects a rate cut. This is hawkish, but this is the dot plot we mentioned before, which is not very meaningful and will change with the data.

Third, they reiterated that subsequent interest rate policies will be decided based on the latest inflation and employment data.

Alright, although the overall tone is neutral to hawkish, the market has mostly priced it in, and these decisions are based on previous data. We can see that the big non-farm payrolls released this month have already cooled down. Now, it all depends on the CPI data to be released next week.

$iShares barclays 20+ Yr Treasury Bd(TLT.US)$Invesco QQQ Trust(QQQ.US)$Apple(AAPL.US)$Micron Tech(MU.US)$NVIDIA(NVDA.US)$Tesla(TSLA.US)