Washington DC [US], July 9 (ANI): The US Federal Reserve meeting on June 16-17 weighed concerns around rising inflation as the lingering impact of tariffs, the closure of the Strait of Hormuz, and the impact of AI buildout raised upside risks.

The meeting was chaired by the newly appointed Fed Chairman Kevin Warsh.

The committee unanimously decided to hold the rates steady at 3.5-3.75 per cent, noting the need to fight persistently high inflation and bring it down to the Fed's comfort level of 2 per cent.

'Participants judged that the risks to the inflation outlook were still tilted to the upside. Many participants noted that elevated commodity prices and supply disruptions could persist longer than currently anticipated,' the minutes of the FOMC meeting stated.

The committee observed that the economic growth for the second quarter is likely to be solid based on incoming data and that the jobs market has remained stable.

'Real consumer spending had been solid, and the AI buildout continued to boost real investment spending on data centres, high-tech equipment, and software. Data for April showed continued strength in both imports and exports of high-tech goods and a jump in energy exports,' the minutes mentioned.

Inflation forecasts for this year and the next have been pegged higher than the one prepared for the April meeting, primarily on account of higher energy prices and the impact of the AI buildout on consumer prices.

However, total inflation was projected to slow over the latter half of this year due to a likely fall in pump prices of gasoline. Core inflation is likely to stay at the same levels for the rest of the year, participants noted.

The participants expect inflation to start trending down from next year and reach the target level of 2 per cent by 2028. (ANI)