Inflation Slowed in June, but These 4 Words From Kevin Warsh Suggest Interest Rate Hikes Are Still a Possibility This Year
The new Fed chair wants inflation under control, and a single data point is not going to be enough to convince him of that.
Overview
A key number that many investors focus on these days is inflation. That's because if inflation is coming down, there's less of a need for the Federal Reserve to raise interest rates in order to get it under control. High interest rates aren't good for stocks as they increase borrowing costs for businesses and can wreak havoc on the stock market. In 2022, when rates began to climb, the S&P 500 (SNPINDEX: ^GSPC) had a disastrous performance, falling more than 19%.
The most recent inflation numbers for June were encouraging and showed that inflation was, in fact, cooling. But for new Fed chair Kevin Warsh, that may not be enough to suggest that it's under control.
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Originally published at www.fool.com.