Fed's Worsh Keeps Inflation Focus Despite Softer June Data

2026-07-15

Federal Reserve Chair Worsh told the US Senate on the 15th that June price data were 'an incomplete measure for assessing the underlying trend in prices.' He reiterated his priority of curbing inflation even as both the consumer price index (CPI) and producer price index (PPI) showed slower growth.

June PPI rises 5.5%

June PPI published by the US Labor Department on the 15th rose 5.5% from a year earlier, slowing from 6.0% in May. CPI released on the 14th also cooled and came in below market expectations, easing bets on further rate increases. In financial markets, the yield on the US two-year Treasury note, which reflects the policy outlook, fell.

In his congressional testimony following remarks on the 14th, Worsh stressed that he was 'not satisfied with any inflation indicator.' He said sharp swings in gasoline prices affected by the situation in the Middle East made it difficult to capture the inflation trend from a single month's data. New York Fed President Williams also said inflation had already peaked and would gradually decline.

Focus on proprietary measures of the underlying trend

At his Senate confirmation hearing in April, Worsh said he placed emphasis on trimmed-mean price measures that exclude fluctuations caused by special factors. The trimmed-mean CPI calculated by the Cleveland Fed slowed to a 2.6% year-on-year increase in June from 2.9% in May. Even so, it remained in the mid-2% range, close to the level the Fed uses as a guide for price stability, but not back to the around-2% level seen before the high inflation of the past five years.

On Fed reform, Worsh has set up a task force of outside experts and is advancing reviews in five areas, including analysis of the factors behind price rises. Within the inflation panel, the group is expected to examine the 'yardstick' used to measure the underlying trend in prices itself. Worsh said, 'I want to hear an update from the task force as early as September, have them report their conclusions by the end of the year, and decide what needs to be done.'

Asked about his relationship with Trump and whether they had been in contact since he became chair, Worsh only said, 'I do not want to disclose what I have spoken about with the president.' On the independence of monetary policy, however, he said flatly, 'There have never been any improper requests from the president, and even if there were, I would not comply.'

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