Wu Says learned that the Federal Reserve’s release of the minutes from the April FOMC meeting shows that officials generally believe inflation is still above the 2% target. Inflation risks are being pushed higher by rising energy prices, conflicts in the Middle East, tariffs, and cost pressures stemming from AI-related investments. Most officials expect that the time needed for inflation to fall back to the target level will be longer than previously anticipated. Although overall economic activity remains solid and AI-related capital expenditures continue to support growth, there are risks of weakening in the labor market, and some companies may slow hiring due to economic uncertainty or AI technology adoption. Most officials also said that if inflation remains persistently above the target, further tightening of policy may be needed in the future; if inflation eases or the labor market worsens significantly, it may be appropriate to cut interest rates.