05/01/2026
Economic Updates –
The start of 2026 has been volatile. Our economy is still strong and growing, even as we see a slight increase to inflation rates.
Core CPI inflation has dropped to 2.6% as of March 2026. This is the measurement for inflation excluding food and oil prices. We actually saw some deflation in core CPI categories like ‘Used Cars and Vehicle’, which was down 3.2% from a year ago. Many other categories have been dropping below 3% with six categories going below 2%. On the contrary, Airline fares were reported to be 14.9% higher year over year and To***co products were 7.4% higher.
CPI inflation including food and oil prices rose a little bit to 3.3%. This is mostly because of the recent increase in oil prices caused by the conflict in Iran and the Straight of Hormuz. Oil prices have the potential to create a longer lasting increase to inflation rates for everything.
The PCE for March 2026 was announced yesterday. PCE grew to 3.5% including food and oil prices. The rate was 3.2% when excluding food and energy. This is still above the Fed’s goal of 2% and shows a fairly steep increase month over month. These rates are still not incredibly high, but inflation rates of over 4-5% would not be good.
Fed Chairman Powell’s term is ending May 2026. Nominee Kevin Warsh is in the process of being confirmed as the next Fed Chairman. Fed goals, at a high level, will most likely remain the same, i.e. moderate inflation and maintain maximum employment; however, there could be some shifts in policy where economic growth is not considered a direct cause of price inflation. This works if economic growth helps bring prices down, which is why there have been incentives to increase domestic manufacturing.
The recent inflationary pressure caused by the rise in oil price could result in further delays to rate cuts or a rate hike amid rising inflation. The risk is heightened the longer that oil prices remain at these levels. The Fed has been expecting to cut rates up to two times this year; however, we will have to see what develops over the next few months.
Sources:
“U.S. Bureau of Labor Statistics, "News Release Table 1, March 2026"
https://www.bls.gov/cpi/tables/supplemental-files/home.htm (Accessed April 17th 2024)
Bureau of Economic Analysis: Personal Income and Outlays, March 2026 – (Accessed May 1st 2026)
https://www.bea.gov/news/2026/personal-income-and-outlays-march-2026
Federal Open Market Committee, Meeting Calendars, statements, and Minutes (2021-2027)
https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm (Accessed April 17th 2026)
Warsh Signals a New Fed Playbook as Confirmation Nears
Forbes - By Simon Moore, Senior Contributor
Published Apr 27th 2026
https://www.forbes.com/sites/simonmoore/2026/04/27/warsh-signals-a-new-fed-playbook-as-confirmation-nears/
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