Everyone is waiting for the FOMC in July, and in fact, I think the marginal effect of the Fed's policy has already decreased significantly How the Federal Reserve and other countries will respond to the failure of economic indicators caused by the acceleration of AI in the future is more worthy of our attention. The Federal Reserve's monetary policy relies on a key assumption: Adjusting interest rates affects investment and consumption, thereby regulating employment and inflation. But in the era of AI, this transmission chain is breaking. Firstly, there is the passivation of the interest rate transmission mechanism. When companies shift their main investments towards AI systems and algorithm optimization, the investment decisions of these 'intangible assets' are much less sensitive to interest rates than traditional factory equipment investments. Secondly, there is the dilemma of inflation targeting. The Federal Reserve's 2% inflation target was set in the 1980s, reflecting the technological level and cost structure at that time. But in an era where the marginal cost of the AI revolution is approaching zero, 2% may be too high. The third is the structural paradox of employment policy. There is still a significant skill mismatch between the new job opportunities created by AI and the traditional jobs that are being replaced, even without considering the possible huge difference in quantity. This means that no matter how the Federal Reserve adjusts monetary policy, it cannot prevent the upcoming huge wave of unemployment, and the traditional concept of "full employment" needs to be redefined. 4、 Good deflation "and" bad deflation " Traditional economics regards deflation as a ferocious beast, as it often accompanies economic recession and debt deflation spirals. But AI driven deflation may belong to another nature - 'good deflation'. Its characteristics are: cost reduction driven by technological progress, accompanied by real income growth and improvement in living standards. In history, the price decline during the Industrial Revolution belonged to this situation. But the problem is that the existing policy framework cannot distinguish between "good deflation" and "bad deflation". The central bank's response function still regards all deflation as the target to be fought against, which may lead to excessive policy stimulus and accumulation of foam risk in other areas. 5、 Local inflation "and" local deflation " The last important point is that while we see the continuous decline in consumer goods prices caused by technological progress and unemployment, leading to local deflation, we also experience local inflation caused by the continuous increase in AI infrastructure investment. The Federal Reserve and national regulators will be more helpless in this situation: easing will further encourage investment to form a speculative foam, and tightening will further depress consumption and affect employment Therefore, no matter from which perspective we analyze, we are likely to see the Fed, the uncrowned king, gradually losing its influence in a dilemma in the near future.