Trump Team Eases Rate-Cut Pressure on Warsh as Inflation Hits 4.1%
Updated
Updated · CNBC · Jun 26
Trump Team Eases Rate-Cut Pressure on Warsh as Inflation Hits 4.1%
3 articles · Updated · CNBC · Jun 26
Summary
4.1% inflation in May has prompted Trump administration officials to stop pressing Kevin Warsh for immediate rate cuts, giving the new Fed chair more room to hold policy steady.
Energy costs tied to the Iran conflict drove much of the rise, while core inflation reached 3.4%, far above the Fed's 2% target and reinforcing Warsh's pledge to deliver price stability.
Last week's Fed meeting kept rates unchanged and dropped its easing bias; nearly half of policymakers now expect hikes this year, and markets price a 79% chance of an increase by December.
Peter Navarro, Scott Bessent and Kevin Hassett have all recently backed a pause or urged flexibility, even as Trump again said Wednesday that he wants lower rates.
Gasoline has fallen to $3.90 a gallon, down 58 cents in a month after the Strait of Hormuz reopening deal, but fresh attacks near the chokepoint leave the late-July Fed outlook uncertain.