Trump’s Fed pressure could fuel inflation
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Fed, Bessent
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The inflation gauge the Federal Reserve relies on most to decide whether to raise or lower U.S. interest rates is likely to cement a decision by the central bank to stand pat at its next meeting at the end of July.
Treasury Secretary Scott Bessent said Monday he believes the Federal Reserve system should be reviewed for potentially holding back the US economy, which is “on the cusp” of growth that could equal the dot-com boom seen in the 1990s.
In a bold and unusually direct speech to close out last week, Fed Governor Christopher Waller laid out the case for an immediate rate cut. He made it clear that he’s prepared to vote for it before the end of the month, even if others aren’t.
Until our central bank changes the way it operates, fights between the Fed and the White House will ever be with us.
The Bureau of Labor Statistics reported that the consumer price index (CPI), a popular inflation gauge, increased in June to 2.7% on an annual basis as prices rose for consumers.
"Toward the end of the year, the housing market may become a bigger deal for inflation than tariffs," Comerica Bank chief economist Bill Adams said.
Rising prices across an array of goods from coffee to audio equipment to home furnishings pulled inflation higher.
Federal Reserve governor Adriana Kugler said the Fed should hold interest rates steady for a while to come, because new trade barriers are likely to spark more inflation in the months ahead. Speaking at a housing conference in Washington,
Indeed, the only guaranteed path for Mr. Trump to get lower interest rates is slower inflation or a weaker job market. Right now, the Fed’s preferred inflation gauge is running closer to 3 percent, still higher than its 2 percent target.
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