Inflation rises as Trump turns up the heat on 'total loser' Fed Chair Jerome Powell

U.S. inflation rose in June as tariffs pushed up the price of some goods, new data showed Thursday, amid a fresh attack from President Donald Trump on the Federal Reserve for its decision to keep interest rates unchanged.

The personal consumption expenditures (PCE) price index rose 0.3% from May, according to the Bureau of Economic Analysis. The figure represents a 2.6% year-on-year increase and an acceleration from the previous month-on-month rise of 0.2%.

The PCE index is the Fed’s preferred measure of underlying inflation. The upwards reading came after central bankers voted to leave interest rates unchanged on Wednesday, keeping its benchmark range at 4.25% to 4.5%.

Central bankers typically bring down interest rates when the economy is struggling and raise them to combat inflation. 

The inflation reading Thursday indicates that attempts to fight price rises are stalling, with fears growing that Trump’s tariffs could push prices even higher in the coming months.

The central bank's decision to hold interest rates steady came despite Trump spending months publicly pressuring Fed Chair Jerome Powell to slash rates by three percentage points — far more than the half-point reduction most officials see as appropriate this year.

Trump relaunched his attacks on Powell early Thursday, posting on his Truth Social platform: “Jerome “Too Late” Powell has done it again!!! He is TOO LATE, and actually, TOO ANGRY, TOO STUPID, & TOO POLITICAL, to have the job of Fed Chair. 

The president added: “He is costing our Country TRILLIONS OF DOLLARS, in addition to one of the most incompetent, or corrupt, renovations of a building(s) in the history of construction! Put another way,“Too Late” is a TOTAL LOSER, and our Country is paying the price!”

The Bureau of Economic Analysis reported that consumer spending rose 0.3% in June after it was unchanged in May. The figures were also included in Wednesday’s report on Gross Domestic Product, which showed consumer spending growing 1.4% annually after nearly stalling in the first quarter.

Those in favor of cutting interest rates have pointed to weak consumer confidence and spending as a factor that could risk a broader economic slowdown, which a rate cut would help avert.

Prices for goods categories that are particularly affected by tariffs picked up the most in June. Furnishings and other household goods rose 1.3% for the month, while recreational goods including electronics rose 0.9% month-on-month.

Speaking on Wednesday before the latest inflation figures, Powell said “the economy is in a solid position." But he pointed to moderating growth and a longer term slowdown in consumer spending in 2025.

Higher tariffs have begun to show through to prices, but the overall effect "remains to be seen," Powell added. He said the Federal Open Market Committee, the Fed body that sets interest rates, has “made no decisions” about a September rate cut, but “everything we do is in service to our public mission.”

—Catherine Baab contributed to this article.