📰 CPI Inflation Shock Resets Fed Rate Cut Bets 📉
💬 Skyler Weinand, chief investment officer at Regan Capital, noted, "The weaker-than-expected CPI will allow the Fed to start cutting interest rates as soon as September. We've now seen multiple encouraging inflation readings after the concerning spike earlier this year."
📊 U.S. inflation pressures eased notably last month, giving the Federal Reserve crucial data ahead of its key June rate decision. On Wednesday, the Commerce Department reported that the headline Consumer Price Index (CPI) for May was 3.3%, down from 3.4% in April and slightly below Wall Street's expectations. On a monthly basis, inflation was flat, marking the smallest rate of price increases in four years.
💡 Core inflation, which excludes volatile components like food and energy, slowed to an annual rate of 3.4%, the lowest in over three years and better than the forecasted 3.5%. The monthly core inflation reading was 0.2%, also below predictions and April's 0.3%.
🎙️ Chris Larkin, managing director for trading and investing at E*Trade from Morgan Stanley, remarked, "Jerome Powell will probably enjoy this afternoon’s press conference more than usual. Today’s CPI will be welcomed by stock market bulls who feared a 2024 rate cut was slipping away. However, the Fed wants to see a consistent trend of falling inflation before making a move. But a September cut is still possible if we continue to get numbers like this one."
