Federal Reserve, inflation
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Trump continues to bash Fed Chair Jerome Powell
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What is clear is that the current 4.33% median Fed funds target rate remains well above the inflation trend. Even after the acceleration in consumer prices in June, the policy rate is roughly 1.4 percentage points above headline CPI’s one-year change – close to the biggest gap post-pandemic.
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.
The Indian rupee fell on Wednesday as the latest U.S. inflation report showed that tariffs were beginning to feed into prices, weakening bets on rate cuts by the Federal Reserve, which lifted U.S. Treasury yields and the dollar.