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As crypto traders brace for zero Federal funds rate cuts in 2026, the FOMC (Federal Open Market Committee) Meeting Minutes for June, released on July 8, show the Fed is wary of the AI (Artificial Intelligence) boom regarding rising inflation.
According to the latest Fed’s FOMC report, the first under Chair Kevin Warsh, the ongoing AI stocks boom has contributed to rising inflation. The Fed’s FOMC, analyzed by Finbold on July 9, shows the Fed under Chair Warsh is concerned about the AI buildout.
Furthermore, the Fed noted that the notable investments in AI stocks, amid the conflict in the Middle East, has impacted asset prices. As such, the Fed is titled hawkish in the near term, with some members signaling a potential Federal rate hike in 2026. However, the Fed commended the memorandum between the United States and Iran, noting that it has lowered inflation amid rising risks of an AI stock market crash.
As such, the odds of zero Fed rate cuts in 2026 surged to 79% at press time, according to data from Polymarket.
The AI boom has been blamed by top Wall Street analysts for taking the air out of non-AI-core assets, as Finbold noted. However, the Fed noted that notable investments in AI stocks – including NVIDIA Corporation (NASDAQ: NVDA), Advanced Micro Devices, Inc. (NASDAQ: AMD), Broadcom Inc. (NASDAQ: AVGO) – over the recent past have fueled the notable rise in asset prices.
What’s next for AI stocks amid the Fed’s inflation concerns?
Wall Street analysts have already cautioned investors about the surge in investment in AI stocks amid intensifying competition and the risk of revenue stagnation. Furthermore, several top economists – including Peter Schiff, the chief economist and global strategist at Europac, and Robert Kiyosaki, author of Rich Dad Poor Dad, have signaled an imminent AI stock market crash akin to prior stock bubble busts.
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