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Fed Warns More Hikes as Core Inflation Rises, GDP 2.1%

7/17/2026

50 8 Full Breakdown

Summary

Story summary

Fed Chair Kevin Warsh told Congress that sticky inflation may still require rate hikes.
Core personal consumption expenditures (PCE) inflation kept rising through May, indicating persistent price pressure.
June wholesale producer price index fell 0.3% month-on-month, the first decline since August 2023.
First-quarter U.S. GDP grew 2.1% annualized, driven mainly by business investment above 10%.

History

Historical Context

In the late 1970s, double-digit inflation—13.5% in 1980—prompted newly appointed Fed Chairman Paul Volcker and President Jimmy Carter to raise the federal-funds target from 11% to over 17% by April 1980, sparking the 1980-82 recession. Today, Fed Governor Kevin Warsh warns that persistent core PCE inflation and 2.1% Q1 GDP growth could again force aggressive tightening, echoing the Volcker era.

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Story summary

Fed Chair Kevin Warsh told Congress that sticky inflation may still require rate hikes.
Core personal consumption expenditures (PCE) inflation kept rising through May, indicating persistent price pressure.
June wholesale producer price index fell 0.3% month-on-month, the first decline since August 2023.
First-quarter U.S. GDP grew 2.1% annualized, driven mainly by business investment above 10%.

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