US Inflation Hits 3-Year High — Fed Holds Rates Under New Chair Warsh
US inflation has surged to its highest level in more than three years, with PCE — the Federal Reserve's preferred price gauge — leading the acceleration. Headline consumer inflation now sits somewhere between 3.4% and above 4% depending on the measure, reflecting broad and persistent price pressure across the economy. Despite the spike, newly installed Fed Chair Kevin Warsh has opted to hold interest rates steady rather than tighten further.
Sticky inflation without a Fed rate response is a dangerous combination for bond and equity investors: it erodes the real value of fixed-income returns and compresses the justification for high stock valuations. Rate-sensitive sectors — utilities, real estate, and long-duration tech — face particular headwinds, while commodities and inflation-linked assets become more attractive. The Fed's hesitation to act also raises the risk that inflation becomes entrenched, forcing a sharper tightening cycle later.
Next FOMC policy meeting (watch for updated rate guidance). Next PCE inflation release (~late June). Next CPI report (~mid-June). Congressional testimony by Fed Chair Warsh (date TBD).
- Could high inflation be the new normal? · NPR Business
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- U.S. inflation tops 4%, but tumbling oil prices to bring price relief soon · MarketWatch
- US Consumer Spending Picks Up as Inflation Hits Three-Year High · Bloomberg
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- Fed's preferred inflation gauge rises in May, matching expectations · Investing.com
- US Inflation Climbs as Consumers Spent More in May · Bloomberg
- Key Fed inflation gauge rises to three-year high in May after gas prices peaked · The Guardian Business
- US Fed's preferred inflation gauge hits fresh three-year high · The Straits Times Business
- Consumer spending rises again — and now cheaper gas is on the way · MarketWatch
- Inflation surges past 4% — but consumers keep spending · Quartz
- U.S. stocks mixed despite positive Micron Q3 results and in-line inflation · Seeking Alpha
- Treasuries climb as benign US inflation eases bets on a Fed hike · Bloomberg
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- Citizens Financial, Capital One, Fifth Third screen best in Fed's stress test · Seeking Alpha
- Fed Chair Warsh appoints veteran economists as advisers, WSJ reports · Investing.com
- Fed to hold rates this year, economists say, defying market bets for hikes: Reuters poll · Investing.com
- Fed Chair Kevin Warsh is building his advisory team from within the central bank · Quartz
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- Yields Rise As The Fed Begins "A New Chapter" · ETF Trends
- Minneapolis Fed's Neel Kashkari now expects a rate hike this year · Quartz
- Fed's Kashkari penciled in one rate hike for 2026 in June dot plot · Seeking Alpha
- IMF economist backs Fed's move to reduce rate guidance · Investing.com
- Fed's Kashkari projects one interest-rate hike this year. Here's what changed his mind. · MarketWatch
- JPMorgan sees inflation problem investors are missing · TheStreet
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