FOMC members: Inflation should tick down the rest of the year

Most participants at last month’s Federal Open Market Committee meeting said they anticipate that inflation will step down over the rest of the year as the effects of tariffs and earlier energy price increases wane.

Details: According to the minutes of the FOMC’s July 28-29 meeting:

• Participants acknowledged that inflation remained elevated.

• Several participants assessed that the effects of the AI buildout on consumer prices had so far been limited.

• Participants generally expected labor market conditions to remain stable in the near term, with the unemployment rate staying close to current levels.

• Participants generally observed that economic activity had continued to expand at a solid pace, despite elevated uncertainty, supported by strong business investment and resilient consumer spending.

• Participants generally expected solid real GDP growth to continue in the near term and pointed to a few factors likely to support continued expansion, including ongoing AI-related investment and household spending.

• In their consideration of monetary policy at this meeting, most participants supported maintaining the current target range for the federal funds rate.

Upcoming Meeting: The next FOMC meeting is scheduled for Sept. 15-16.