U.S. inflation has moved down from the peak levels of last summer but remains relatively high, the Consumer Price Index for May will bring an update. Markets increasingly expect the Fed to pivot to lower rates. Yet, the Fed have signaled no real intention to do so. On June 13, right before the next Fed meeting to set interest rates, we’ll see CPI figures for the month of May.
2023 Inflation Moving Lower
Inflation has been decelerating so far this year. Energy prices are falling relative to last year, and food prices are generally flat month-on-month after a previous surge. However these more volatile prices are stripped out of the core inflation that the Fed monitors, that has stayed in a 5% to 7% range. Headline inflation has come down, but the Fed worries that too much underlying inflation remains. For now, the Fed plan to hold rates high until they see clear evidence that inflation is beaten.
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