US Inflation Rises to 2.6% Amid Tariffs

U.S. inflation, as measured by the Federal Reserve's preferred PCE index, rose to 2.6% year-over-year in June, up from 2.4% in May, mainly due to tariffs imposed by President Trump on imported goods such as furniture, apparel, and electronics. Core PCE inflation remained high at 2.8%, signaling ongoing price pressures in tariff-sensitive categories. The Federal Reserve kept interest rates steady and signaled that a rate cut is unlikely in September, despite political pressure from President Trump. Consumer spending increased by 0.3% in June after a May decline, while jobless claims rose less than expected. Policymakers and economists remain split on the outlook for rate cuts, as inflation diverges from the Fed's target. Continuing trade tensions and new tariffs are clouding the economic outlook.