U.S. inflation & Fed leadership shift
Key Questions
What were the latest US inflation readings for May?
Headline CPI came in at 4.2% with core at 2.9%, while PCE reached 4.1% (a 3-year high) and core PCE was revised up to 3.3%. These figures underscore persistent price pressures.
What was the outcome of Kevin Warsh's first FOMC meeting?
The meeting produced a hawkish hold that removed the easing bias, with the dot plot showing nine officials expecting a rate hike by year-end. Markets are now pricing a 64% chance of a September hike.
What did former Fed Vice Chair Ferguson say about future rate policy?
Ferguson stated that the rate-cut era is over and a hike this year is now 'near certain' given the inflation data.
What challenges does Warsh face as Fed Chair?
Warsh must balance surging inflation against President Trump's demands for rate cuts while managing communications and balance sheet plans.
How did the FOMC dot plot affect gold prices?
Gold broke below the $4,320 floor as the hawkish dot plot overrode earlier safe-haven buying related to geopolitical tensions.
May CPI at 4.2% headline (core 2.9%), PCE at 4.1% (3-year high), core PCE revised to 3.3%. Warsh's first FOMC delivered hawkish hold, removal of easing bias, dot plot shows nine officials see a hike by year-end. Markets price 64% chance of September hike. Former Fed Vice Chair Ferguson says hike 'near certain'. Warsh caught between inflation and Trump's rate-cut demands. Focus on Warsh's communications and balance sheet plans.