Recent data from the Department of Commerce shows an increase in inflation in the US, which could impact future decisions by the Federal Reserve. This has drawn attention from both economists and politicians.
Increase in PCE Index
The US Department of Commerce reported that the PCE index for June rose by 0.3% from May's figure of only 0.1%. The annual inflation rate also increased to 2.6%, compared to 2.3% the month before. The core PCE reading, which excludes food and energy, also increased by 0.3% month-over-month and 2.8% year-over-year, surpassing market expectations.
Trump's Criticism of the Fed
President Donald Trump expressed discontent towards Jerome Powell, calling him 'TOO LATE, TOO STUPID, & TOO POLITICAL.' He also claimed that the Fed Chair is costing the country 'TRILLIONS OF DOLLARS.' Trump continues to publicly criticize Powell, blaming him for being slow to respond to changes in the economy.
Markets React to Inflation Data
Concerns are also rising with wage growth showing only a 0.1% increase month-over-month, the slowest rate since November 2024. Additionally, the personal savings rate remained flat at 4.5%, showing no improvement. Investors have begun to look towards gold as a safer asset, with its price increasing by 1% to $3,308.07 per ounce.
The rise in inflation presents new challenges for the Federal Reserve and the economy at large. The Fed's response and the administration's policies will be key in shaping future economic plans.
