Trump Team Faced with Rising Inflation and Rate Hike Uncertainty

US President Donald Trump's Treasury secretary, Scott Bessent, is facing economic headwinds. Core inflation has accelerated from 3.3% over the past 12 months to 3.8% on a six-month annualized basis.

This trend could potentially lead to higher interest rates, which might be a concern for Trump and his team ahead of the midterm elections. However, it appears that new Federal Reserve chairman Kevin Warsh has been persuaded not to raise rates, at least not until after the elections.

Warsh's communications style has also contributed to an increase in long-term interest rates. Despite this, the Fed's decision to hold off on rate hikes might be seen as a relief by some investors and economists, who had feared a more aggressive monetary policy response from the central bank.