Everyone is waiting for the FOMC in July, but I think the diminishing marginal effects of the Fed's policies are already quite evident. What we should pay more attention to is how the Fed and other countries will respond to the failure of economic indicators brought about by the acceleration of AI. The monetary policy of the Federal Reserve relies on a key assumption: By adjusting interest rates, it influences investment and consumption, thereby regulating employment and inflation. However, in the AI era, this transmission chain is breaking down. First, the dulling of the interest rate transmission mechanism. When a company's main investments shift towards AI systems and algorithm optimization, the sensitivity of these "intangible asset" investment decisions to interest rates is far lower than that of traditional investments in physical plants and equipment. Second, the dilemma of inflation targeting. The Fed's 2% inflation target was set in the 1980s, reflecting the technology level and cost structure of that time. But in the era of the AI revolution, where marginal costs approach zero, 2% may be too high. Third, the structural paradox of employment policy. The new jobs created by AI and the traditional jobs being replaced, even without considering the potential huge difference in numbers, also face significant skill mismatches. This means that no matter how the Fed adjusts its monetary policy, it cannot prevent the impending wave of massive unemployment; the traditional concept of "full employment" needs to be redefined. Fourth, "good deflation" vs. "bad deflation." Traditional economics views deflation as a monster because it often accompanies economic recession and a debt-deflation spiral. However, AI-driven deflation may belong to a different nature—"good deflation." Its characteristics include: cost reductions driven by technological advancements, accompanied by real income growth and improved living standards. Historically, the price declines during the Industrial Revolution fall into this category. But the problem is that the existing policy framework cannot distinguish between "good deflation" and "bad deflation." Central banks' reaction functions still treat all deflation as a target to combat, which may lead to excessive policy stimulation and the accumulation of bubble risks in other areas. Fifth, "localized inflation" vs. "localized deflation." Finally, an important point is that while we see the prices of consumer goods continuously declining due to technological advancements and unemployment, we will also experience localized inflation resulting from the continuous increase in AI infrastructure investment. The Fed and regulatory authorities in various countries will be increasingly helpless in this situation: easing will further encourage investment, creating speculative bubbles, while tightening will further suppress consumption and impact employment. Therefore, regardless of the angle from which we analyze it, we are likely to see the Fed, this crownless king, gradually losing its influence amid the awkwardness of being caught in a dilemma in the near future.