The Federal Reserve\u2019s preferred inflation gauge ticked up slightly in June as tariffs on imports started raising the cost of some goods \u2013 dampening hopes for an interest rate cut in September.<\/p>\n
The personal consumption expenditures (PCE) price index\u00a0rose 0.3% last month. matching the the estimate of economists polled by Reuters. Year over year, the PCE increased 2.6%<\/p>\n
Core PCE \u2013 which excludes volatile food and energy prices \u2014 also increased 0.3% from the month before \u2013 its highest rise since February and coming in hotter than expected, the Bureau of Economic Analysis said Thursday. <\/p>\n
Federal Reserve Chairman Jerome Powell speaking during a press conference following the Fed\u2019s two-day meeting in July. REUTERS<\/p>\n
The figure rose 2.8% from the year before.<\/p>\n
\u201cThursday\u2019s PCE was stronger-than-expected and throws cold water on the idea of a fall rate cut,\u201d Clark Bellin, president and chief investment officer at Bellwether Wealth, said in a note Thursday.<\/p>\n
\u201cInflation remains sticky and justifies the Fed\u2019s decision to keep interest rates unchanged at Wednesday\u2019s meeting.\u201d<\/p>\n
Despite intense pressure from President Trump on Fed Chair Jerome Powell to lower rates, central bankers kept them between 4.25% and 4.5%.<\/p>\n
Powell, responding to questions from reporters on the anticipated tariff-related price increases Wednesday, said \u201ca reasonable base case is that these are one-time price effects,\u201d but added \u201cI think we\u2019ve learned that the process will probably be slower than expected\u201d and take time to fully understand.<\/p>\n
The PCE data was included in the advance\u00a0gross domestic product\u00a0report for the second quarter published on Wednesday, which showed inflation cooling, though remaining above the Fed\u2019s 2% target.<\/p>\n
The GDP figures showed the US economy grew at a faster pace<\/a> than anticipated, refuting predictions the the country would fall into a recession. <\/p>\n On Thursday, Trump once again bashed Powell for refusing to lower rates, which the president insists should be 1% or less.<\/p>\n The Federal Reserve on Wednesday kept interest rates unchanged. REUTERS<\/p>\n \u201cHe is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair,\u201d Trump said in a Truth Social post.<\/p>\n \u201cHe is costing our Country TRILLIONS OF DOLLARS, in addition to one of the most incompetent, or corrupt, renovations of a building(s) in the history of construction!\u201d<\/p>\n Two Fed governors voted against Powell\u2019s<\/a> \u201cwait and see\u201d approach \u2013 marking the first time in three decades that more than one official has dissented on an interest-rate vote.<\/p>\n Christopher Waller and Michelle Bowman<\/a> called for the immediate lowering of rates, piling on to pushback against Powell \u2013 who has been reluctant to cut rates over fears that Trump\u2019s tariffs could reheat inflation over the next few months.<\/p>\n Powell also wouldn\u2019t commit to a rate cut when the Fed next meets in September.<\/p>\n President Trump and Chair Jerome Powell during a tour of the Fed\u2019s construction site. AFP via Getty Images<\/p>\n \u201cWe have made no decisions about September,\u201d hel said during a press conference Wednesday following the Fed\u2019s two-day meeting.\u00a0<\/p>\n \u201cWe don\u2019t do that in advance. We\u2019ll be taking that information into consideration and all the other information we get as we make our decision.\u201d<\/p>\n Powell emphasized that the tariffs are \u201cstill quite early days\u201d and that companies appear to be eating the bulk of the new charges for now, so data could change if these duties are passed along to consumers.<\/p>\n Last Friday, Trump had said he believed Powell was ready<\/a> to start lowering rates after he joined the central banker in matching hard hats for a tour of the Fed\u2019s controversial $2.5 billion renovation project<\/a> at its headquarters.<\/p>\n When asked whether he thinks the Trump administration\u2019s scrutiny over the renovations is tied to the push for lower rates, Powell said: \u201cNot for me to say.\u201d<\/p>\n He added that it \u201can honor\u201d to host Trump at the Fed and \u201ca good visit,\u201d declining to comment on how the president\u2019s public pressure could impact the Fed\u2019s independence.<\/p>\n","protected":false},"excerpt":{"rendered":"The Federal Reserve\u2019s preferred inflation gauge ticked up slightly in June as tariffs on imports started raising the…\n","protected":false},"author":2,"featured_media":50359,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101,2800,2402,9007,2938],"class_list":["post-50358","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-federal-reserve","tag-inflation","tag-interest-rates","tag-jerome-powell"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/50358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=50358"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/50358\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/50359"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=50358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=50358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=50358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}