WASHINGTON, D.C. — Federal Reserve Chair Kevin Warsh stated the central bank's benchmark interest rate could be lowered. Members of the Federal Open Market Committee have expressed opposition to lowering the benchmark interest rate.

The Commerce Department reported that the personal consumption expenditures price index increased by a seasonally adjusted 0.4% in April. The 12-month headline inflation rate was 3.8%, the highest since May 2023. Core personal consumption expenditures prices, excluding food and energy, increased by 0.2% in April and by 3.3% over 12 months, the highest core inflation rate since November 2023. The Federal Reserve uses personal consumption expenditures price index measures as its primary forecasting and policy tool.

The personal savings rate decreased to 2.6% in April, the lowest level since June 2022. Durable goods orders increased by 7.9% in April, and new durable goods orders excluding transportation increased by 1.1%.

The Commerce Department revised first quarter gross domestic product growth to an annualized rate of 1.6%, down from the initial 2% estimate due to downward revisions in consumer spending and investment. The Labor Department reported that seasonally adjusted initial jobless claims for the week ended May 23 totaled 215,000, an increase of 5,000 from the previous period.

Market participants expect the Federal Reserve to maintain its benchmark interest rate until late 2026. Market pricing indicates a probability that the Federal Reserve's next interest rate adjustment will be an increase. Federal Reserve policymakers have recently prioritized inflation monitoring as data indicates labor market stabilization.