- The Federal Reserve reported that inflation 'stepped up further' during the spring of 2026, with the Personal Consumption Expenditures (PCE) Price Index running at approximately double the 2% target as of May.
- The central bank identified three core catalysts for elevated prices: the impact of tariffs, rising energy costs stemming from the U.S.-Israeli war with Iran, and the massive capital expenditure cycle for artificial intelligence.
- While the labor market is viewed as stable with a 4.2% unemployment rate, the Fed noted a stagnation in labor supply due to aging demographics and a significant slowdown in immigration.
Quotes
“Inflation has risen this year and remains elevated relative to the Federal Open Market Committee's longer-run objective of 2%”