Fed Falters to Tame Inflation Amid Global Turmoil

The US Department of Commerce released the July personal consumption expenditures price index, which is the Federal Reserve's preferred measure of inflation. The PCE has been stuck above the Fed's 2% target for over five years now.

The July report showed that core PCE, which strips out volatile food and energy prices, grew by 3.3%. However, experts say that the type of inflation plaguing the country is caused by factors outside the Fed's control, such as commodity prices and tariffs.

'They cannot influence the war in Iran,' said Danielle DiMartino Booth, founder and CEO of Q1 Research. 'They cannot influence what's happening in the Strait of Hormuz. They cannot influence commodity prices. And they cannot influence prices that are driven upwards by tariffs.'

Fed officials can only fix the economy when demand is the problem, but their tools would not be effective now. Fed Chair Kevin Warsh continues to insist that inflation will get back to the 2% target.