US Inflation Hits 65-Month High, Raising Bets for Interest Rate Hikes

US inflation continues to be a concern for investors and policymakers alike. According to recent data, US car prices rose at an annual rate of around 5% in July 2026, while housing and utility costs increased by more than 3.5%. Recreational goods saw double-digit price surges.

This contributed to household living costs rising by 3.7%, nearly twice the Federal Reserve's (Fed) inflation target of 2%. The Fed has now failed to meet this target for 65 consecutive months, dating back to 2021 when prices surged to a 40-year high amid the Covid-19 pandemic.

Fed Chair Kevin Warsh is under pressure to address this issue in his upcoming speech at the Kansas City Fed's annual research symposium in Jackson Hole, Wyoming. Analysts and investors see this as an early test of Warsh's readiness to adjust policy amidst growing concerns over the direction of the economy and monetary policy.

Since taking office, Warsh has emphasized his commitment to achieving the Fed's inflation target without explaining how he plans to achieve it. Instead, he has focused on long-term issues being studied by several Fed task forces. This lack of detail has raised concerns about the central bank's independence.