The June Fed meeting is coming very soon, and it is a massive event for your money. If you hold any crypto or just want to know where the economy is heading, you need to pay attention. Right now, the Federal Reserve is splitting into two sides:

Today, let's look closely at this big debate. It is also important to discuss the June FOMC meeting and its direct impact on your wallet.

My main goal is to explain these complex money topics in very simple terms. By going through everything step-by-step together, you can feel completely prepared for the market changes.

We can start from the very beginning. The Federal Reserve, usually just called the Fed, is the central bank of the United States. They have a big job.

They control the interest rates. Interest rates are simply the cost of borrowing money. Imagine you want to buy a house or a car.

You need a loan from the bank. The interest rate decides how much extra money you pay back to the bank.

When the Fed changes this rate, it changes the cost of money for everyone in the country. We can learn this together because it affects your daily life in many ways.

When the Fed cuts rates, borrowing money becomes cheap. People and big companies can take out loans easily. Because they have more cash, they like to put it into riskier things like Bitcoin or tech stocks to make more profit.

This extra cash flowing around is called liquidity. More liquidity is usually very good for the crypto market and pushes prices up.

You can look at the image below to understand this concept better. Good liquidity means you can easily and quickly convert your digital tokens into cash or other coins.

On the other hand, when the Fed raises rates or keeps them high, borrowing money is expensive. People prefer to keep their cash safe in the bank because the bank pays them good interest. Money flows out of crypto.

When rates are high, many smart investors move their money into stablecoins. Stablecoins are crypto tokens pegged to the US dollar, so they do not drop in value like Bitcoin might.

Understanding this flow helps you avoid buying at the wrong time. The result of the June Fed meeting will decide if big money flows back into crypto or stays away.

This part is very interesting. You might ask why the new Chair, Kevin Warsh, wants to cut rates so badly. His main reason is AI. He believes AI is creating a massive deflationary wave. Deflation simply means things are getting cheaper over time.

Think about it. The cost to run powerful AI models has dropped a lot. Back in early 2023, it cost about $30 for a million tokens.

Tokens are the units that AI uses to process data. Think of them like syllables in a word. Today, it costs just pennies. Because AI is so cheap, businesses can do their work faster and spend less money. Companies are automating tasks with AI agents.

This brings their costs way down. Warsh thinks that as intelligence becomes basically free, the cost of running all industries goes down too.

He warns that the Fed is using old models from the 1970s. He thinks if the Fed keeps rates high while AI is making things cheaper, they hurt the economy.

So, he hopes the June Fed meeting brings rate cuts to help businesses grow.

But there is another side to the story. Goldman Sachs analysts point out that companies are actually raising prices because they added new AI features.

For example, $MSFT ( ▼ 0.81% ) raised M365 prices by 30% (from $99.99 to $129.99 per year). Adobe raised Creative Cloud Photography by 50%. Intuit raised QuickBooks by 45%.

So, analysts argue that AI is making software more expensive in the short term. This adds to inflation. Inflation means things are getting more expensive.

Christopher Waller looks at the inflation picture differently. He sees that inflation is still above the Fed's 2% target, partly because of high oil prices and other factors.

Waller wants to keep rates high at the June Fed meeting to fight this inflation, even though he did not say AI caused the price hikes.

Waller is looking closely at the real numbers, and he does not like what he sees. To understand this, we need to look at two simple terms: CPI and PCE.

Recently, the CPI went up by 0.6% in just one month. Almost half of all CPI categories went up by more than 3% this year.

The PCE is also hitting high numbers. This tells us that inflation is still a big problem. Prices for everyday items went up a lot this year.

One of the biggest reasons is oil. Because of conflicts in the Middle East, especially around the Strait of Hormuz, oil prices are very high. About 20% of the world's oil travels through that small area. When oil is expensive, shipping gets expensive. Then, the food and clothes you buy also get expensive.

Waller points out that the Fed has missed its 2% inflation goal for six straight years. He is worried that people will start believing inflation will never go down.

If that happens, it becomes a self-fulfilling belief. He thinks if they cut rates at the June Fed meeting, it will cause prices to explode again.

So, it all comes down to oil. If the situation in the Middle East calms down and oil gets cheaper, Warsh's side might win. We could see rate cuts. But if oil stays expensive, Waller's side will likely win. Rates will stay high. We will watch these events together.

You might feel confused by all this news. But do not worry, you can use AI to help you track everything easily.

I have been testing different methods to read the news, and setting up simple AI workflows is the best way to stay updated. We can build a simple habit together.

Instead of reading boring financial reports, you can let AI do the hard work. You can use platforms like n8n to automate your news reading.

But if you are a beginner, you can just start with Claude or ChatGPT. You just need to copy news text and paste it into these tools. They read it for you and explain it simply.

Here is exactly how you do it. First, find a news article about the Fed. Copy all the text.

Next, open your AI tool. Paste the prompt I give you below, and then paste the article text right under it. Press enter and wait for the results:

When you use this prompt, the AI removes all the hard words and gives you a clear answer. You know exactly what is happening in the market.

Here is another prompt if you like to look at market charts on TradingView or other platforms. You can take a screenshot of a chart, upload it to the AI, and say:

By using these simple prompts, you do not get lost in the noise. You can read any news about the June FOMC meeting and understand it in seconds.

We can easily track what the big banks are doing without needing an economics degree.

So, get your tools ready, keep an eye on oil prices, and watch out for the upcoming announcements. It is a very exciting time for the markets, and now you have the skills to handle it confidently.

⚠️ Disclaimer: This newsletter is for informational purposes only, just for fun and knowledge. This is not investment advice. Your money, your responsibility!