The Federal Reserve’s preferred inflation gauge ticked higher last month in a sign that President Donald Trump’s broad-based tariffs are starting to lift prices for many goods.
The Federal Reserve’s preferred inflation gauge ticked higher last month in a sign that President Donald Trump’s broad-based tariffs are starting to lift prices for many goods.
Prices rose 2.6% in June compared with a year ago, the Commerce Department said Thursday, up from an annual pace of 2.4% in May. Excluding the volatile food and energy categories, prices rose 2.8% in the past year, the same as the previous month, which was revised higher. The figures are above the Fed’s 2% goal.
The uptick in prices helps explain the central bank’s reluctance to cut its key interest rate this week, despite repeated demands from Trump that it do so. On Wednesday, the Fed left its key rate unchanged at 4.3%, and Chair Fed Powell suggested it could take months for the central bank to determine whether the import duties will cause just a one-time rise in prices, or a more persistent increase in inflation.
Trump has attacked Powell personally and repeatedly, and did so again on Thursday for the Fed’s reluctance to cut rates, calling him “TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair.
