Kevin Warsh has been on the job for less than a month, and the US economy is already testing him.
The newly sworn-in Federal Reserve Chair, who took the reins on May 22 as the 17th person to hold the title, is staring down a May Consumer Price Index report showing inflation running at 4.2% year-over-year. That’s the hottest reading since April 2023, and it lands squarely in his lap just days before his first FOMC meeting on June 16-17.
The numbers tell an uncomfortable story
A 4.2% annual inflation rate is more than double the Fed’s 2% target. The month-over-month figure came in at 0.5% on a seasonally adjusted basis, suggesting price pressures aren’t just lingering. They’re accelerating.
Core CPI, which strips out volatile food and energy components, sits at 2.9% year-over-year. Rising energy prices, driven in large part by geopolitical dynamics, are doing much of the heavy lifting on the headline number.
