Source: Fortune.com
Summary
The Federal Reserve’s policymaking committee voted 9-3 to hold interest rates steady, despite three dissents pushing for a rate hike. Fed Chair Kevin Warsh emphasized that inflation still must fall without tipping his hand on where rates would go in the future. The Fed’s preferred inflation index, the personal consumption expenditures price index, showed inflation at 3.7% in June 2026, while the Dallas Federal Reserve’s trimmed mean measure calculated it at 2.2%. The difference in inflation rates is due to the various ways of measuring inflation, which can lead to different estimates.
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The numbers tell one story.
The Fed is rethinking how to weigh different inflation estimates, which will shape interest rate decisions and affect households and businesses. The 2% inflation target is not under review, but the way the Fed measures inflation is. Warsh has named task forces to reevaluate how the Fed measures inflation, and changes could be coming soon. The choice of index moves money every year through Social Security’s annual cost-of-living adjustment and tax brackets.
The “real” inflation rate depends on the question being asked and on who has the power to choose the answer.
Author: Evan Null
