Federal Reserve Chair Kevin Warsh stated that inflation is not decelerating and reaffirmed the Fed’s commitment to achieving a 2% inflation target by 2026. The current inflation rate stands at 3.7% based on the 12-month Personal Consumption Expenditures (PCE) price index. The federal funds rate is currently set between 3.5% and 3.75%. Market participants interpret these remarks as an indication that the Fed may maintain or even increase interest rates if inflation does not align with the 2% target.
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