The first inflation report under new Fed chief Kevin Warsh is out — and it’s not good

The latest inflation report released under the new Federal Reserve chief Kevin Warsh has brought some concerning news. Consumer prices in April reached their highest level in almost three years, with the personal consumption expenditures price index rising at an annual rate of 3.8%, as reported by the Commerce Department. This marks an increase from 3.5% in March and 2.8% in February, surpassing economists’ expectations of a 3.9% rise.

Warsh, who has recently taken over as Fed chief, faces a significant challenge as inflation continues to rise due to the impact of the Iran war on energy prices. The central bank had initially predicted one interest rate cut in 2026, but with the surge in fuel costs, this prediction is now being reconsidered. President Trump’s call for lower borrowing costs to stimulate economic growth further complicates the situation.

Some economists are now speculating about a possible rate hike later this year. The probability of a rate hike at the Federal Reserve’s December meeting has increased to 40%, up from 3% at the June meeting, according to CME FedWatch.

As this situation continues to evolve, it is crucial for policymakers to carefully monitor the economic landscape and make informed decisions to ensure stability and growth. Stay tuned for updates on this developing story.

– This article has been edited by Alain Sherter

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