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Fed Holds Rates; Warsh Hints AI Cuts, Trump Demands

5/29/2026

Summary

Warsh Holds Rates

Federal Reserve (Fed) kept its benchmark rate at 3.50%-3.75% as new chair Kevin Warsh prepared for his first policy meeting on June 16-17, 2026.
Headline personal consumption expenditures (PCE) rose 3.8% YoY in May 2026 while April’s Consumer Price Index jumped 3.8% YoY, with energy up 18% and airline fares over 20%.
Warsh argued AI-related investment could lower prices and enable earlier cuts, while President Donald Trump has pressured the Fed to cut rates.

Summary

Savings Rate Falls

The personal saving rate fell to 2.6% in April, the lowest since June 2022, as real disposable personal income dropped 1.1% year-over-year, the steepest decline since November 2022.
First-quarter GDP growth was cut to 1.6% annualized while non-defense capital goods orders slipped 1.1% in April, a proxy for business investment.
Hefty tax refunds this spring softened the impact of rising prices for many low-income households.

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Warsh Holds Rates

Federal Reserve (Fed) kept its benchmark rate at 3.50%-3.75% as new chair Kevin Warsh prepared for his first policy meeting on June 16-17, 2026.
Headline personal consumption expenditures (PCE) rose 3.8% YoY in May 2026 while April’s Consumer Price Index jumped 3.8% YoY, with energy up 18% and airline fares over 20%.
Warsh argued AI-related investment could lower prices and enable earlier cuts, while President Donald Trump has pressured the Fed to cut rates.

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