After serving as the Federal Reserve chair for eight years, Jerome Powell handed the reins to Kevin Warsh, who recently made his first interest rate decision. The federal interest rate gets a lot of attention because it affects a key part of the country’s monetary policy, which can trickle over into the stock market.
One number ultimately affects how expensive mortgages and other loans are, as well as corporate borrowing costs. That’s why companies and consumers alike tune in to the Fed’s interest rate decisions to gauge how they will affect the economy. Let’s take a look at what the Fed’s latest interest rate decision means for investors.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Official Federal Reserve Photo.
Inflation is still on the rise
Inflation has been rising consistently this year, with much of it stemming from the current conflict in Iran and its effects on energy prices and industries (like airlines) that rely on energy. In May, overall inflation increased by 4.2% year over year, a slight increase from the 3.8% it increased in April. Here is how inflation in the energy index measured up:
Index
Inflation
Energy (all)
23.5%
Gasoline
40.5%
Fuel oil
58.9%
Energy services
5.3%
Electricity
5.9%
Data source: U.S. Bureau of Labor Statistics.
Slight inflation is often healthy for the economy, but the current inflation has pushed well past that point, which is where the Fed comes into the picture.
The Fed’s latest interest rate decision
At its June meeting, the Fed decided to keep interest rates steady within its current 3.5% to 3.75% range, where they have been since December 2025. That’s the good news. The could-be-better news is that interest rates are likely to increase later this year due to rising inflation.
Target Federal Funds Rate Upper Limit…..
