News Wrap: Fed says inflation still too high and more interest rate hikes likely

Geoff Bennett:

In the day's other headlines: Federal Reserve Chairman Jerome Powell warned that inflation is still too high and that more interest rate hikes are likely this year.

At a congressional hearing, he said there's still a long way to go to reach the Fed's goal of 2 percent inflation. But, he said, pausing rate hikes last week was consistent with that goal.

Jerome Powell, Federal Reserve Chairman:

Given how far we have come, it may make sense to move rates higher, but to do so at a more moderate pace. And now we're monitoring that pace, much as you might do if you were to be driving 75 miles an hour on the highway, then 50 miles an hour on a local highway, and then, as you get closer to your destination, as you try to find that destination, you slow down even further.

Geoff Bennett:

Powell said there's no timetable for future rate hikes, but that economic data will dictate those decisions.

A new assessment finds pandemic learning losses are still getting worse. The U.S. Education Department reports test scores for 13-year-olds have dropped again. From 2020 to 2023, average math scores fell by nine points, the most ever, to their lowest level since 1990. Average reading scores for the age group fell four points to their lowest since 2004.

In the Middle East, hundreds of Israeli settlers stormed a Palestinian town in the occupied West Bank today. Palestinians said at least one person was killed. Social media footage showed dozens of buildings and vehicles burning. The attack came a day after two Palestinian gunmen killed four Israelis in the area.

This evening, an Israeli drone attacked a car carrying suspected gunmen. Palestinian reports said three people were killed.

Russia's military says it downed to drones near a base outside Moscow today. It blamed Ukraine, but Kyiv had no immediate comment. Ukrainian President Volodymyr Zelenskyy did acknowledge that progress in his army's counter offensive has been slower than desired, but he said he won't be pressured to speed things up.

China and the U.S. are in a new dispute after President Biden likened Chinese leader Xi Jinping to a dictator. He said last night that Xi had not known about the alleged Chinese spy balloon over the U.S. in February.

President Biden said — quote — "That's a great embarrassment for dictators when they didn't know what happened." Beijing called the comments extremely absurd and irresponsible. But the State Department rejected the criticism.

Vedant Patel, Principal Deputy State Department Spokesperson:

We won't hesitate to call out areas where we disagree or to be blunt and forthright about some of these differences. And, of course, one of those areas and that the president the secretary have been clear about is the differences between democracies and autocracies and what they have.

Geoff Bennett:

The exchange came on the heels of Secretary of State's Antony Blinken is meeting with Xi in Beijing to repair relations.

The Air National Guardsman accused of leaking classified military documents was arraigned today in federal court outside Boston. Jack Teixeira pleaded not guilty to federal charges of willful retention and transmission of secret military information. He's been jailed since his arrest in April.

The IRS improved its performance during this year's tax season. A watchdog report shows the agency has cut its backlog of paper returns by 80 percent. And it's slowly getting better at answering phone calls. The IRS received $80 billion in new funding last year, but lost some of that money in the recent debt limit deal.

On Wall Street, tech stocks lead the broader market lower. The Dow Jones industrial average lost 102 points to close at 33951. The Nasdaq fell 165 points. The S&P 500 was down 23 points.

And, in Southern England, some 8,000 revelers descended on Stonehenge to mark the summer solstice. They gathered around the prehistoric stone circle to greet the sunrise on this longest day in the Northern Hemisphere. The crowd included Druids, tourists and locals all ushering in the official start of summer.

Still to come on the "NewsHour": we take the temperature of voters on some of the nation's most contentious issues; Supreme Court Justice Samuel Alito faces scrutiny over an undisclosed luxury trip from a GOP donor; and new questions arise about former President Trump's business ties with Oman.