Skip to main content

US Inflation Cools to 4% Annual Rate, Setting Stage for Fed’s Decision on Interest Rates

US Inflation Cools to 4% Annual Rate, Setting Stage for Fed's Decision on Interest Rates

The U.S. Bureau of Labor Statistics’ consumer price index (CPI) report, released on Tuesday, reveals that inflation in the United States has eased to a yearly rate of 4%. The latest development arrives just ahead of the upcoming Federal Open Market Committee (FOMC) meeting scheduled for June 14. The prevailing market sentiment leans towards the anticipation that the Fed will maintain the current benchmark interest rate.

Consumer Price Index Report Shows U.S. Inflation Slows to 4% Amid Market Expectations for Steady Interest Rates

The latest report from the U.S. Bureau of Labor Statistics (BLS) reveals that the annual inflation rate dipped to 4% in May. This data marks the smallest increase since March 2021, a significant turning point when inflation began its rapid ascent, prompting the Federal Reserve to adopt measures such as monetary tightening and interest rate hikes.

“The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in May on a seasonally adjusted basis, after increasing 0.4 percent in April,” the U.S. Bureau of Labor Statistics reported. “Over the last 12 months, the all items index increased 4.0 percent before seasonal adjustment.”

The announcement had a positive impact on Wall Street as all four key stock indexes experienced gains, while the crypto economy witnessed a 0.62% rise on Tuesday morning. However, the New York-based spot prices of gold and silver took a hit, with gold declining by 0.23% and silver shedding 0.37%. Market participants eagerly await the upcoming FOMC meeting tomorrow to ascertain whether the U.S. Federal Reserve will opt for an increase in the federal funds rate.

Presently, the interest rate stands at its highest point in 16 years, and the CME Fedwatch tool indicates a staggering probability of over 93% that there will be no rate hike this month. Approximately 6.9% of market participants anticipate a 25-basis-point (bps) increase by the U.S. central bank. Nevertheless, history has shown the Fedwatch tool to be remarkably accurate, suggesting that the 25bps hike may be deferred until the subsequent FOMC meeting.

While there is a prevailing belief among many that the Federal Reserve will refrain from increasing the rate this month, a considerable number of analysts and economists hold the view that the Fed will maintain this pause throughout the entirety of 2023.

“The encouraging trend in consumer prices will provide the Fed some leeway to keep rates unchanged this month and if the trend continues, the Fed will not likely hike for the rest of the year,” Jeffrey Roach, chief economist at LPL Financial told CNBC on Tuesday following the latest CPI report.

Will the latest dip in inflation convince the Federal Reserve to maintain interest rates or could it signal a shift in monetary policy? Share your thoughts and opinions about this subject in the comments section below.



from Bitcoin News https://ift.tt/ZDRsyvQ
Labels:

Comments

Post a Comment

Popular posts from this blog

Mt Gox Creditors Updated, Trustee Says Rehabilitation Custodian Is ‘Currently Preparing to Make Repayments’

On August 31, 2022, the Mt Gox trustee Nobuaki Kobayashi explained in a recent letter that the rehabilitation custodian is “currently preparing to make repayments” to Mt Gox creditors. Trustee Updates Mt Gox Creditors — Repayment Date and Exchange Still Unknown Last week speculation and rumors concerning the release of 140K bitcoin ( BTC ) from Mt Gox littered social media platforms and headlines. Bitcoin.com News covered the situation six days ago as a number of people and Mt Gox creditors called the rumors “ fake news .” During that same period of time, a bitcoin whale transferred 10,000 BTC to unknown wallets, and a 2018 annotation , heuristics, and clustering methods show the funds likely originated from the June 2011 Mt Gox hacks. Following the mysterious whale transfer, last Wednesday, Mt Gox published an official update from the court trustee Nobuaki Kobayashi that explains the court is “currently preparing to make repayments” to creditors. Mt Gox creditors have been wait...
Post a Comment
Read more

Fidelity Discusses Bitcoin as Portfolio Insurance — Could Soon Stand in ‘Stark Contrast’ to Path Fiat Currencies Take

Fidelity Digital Assets, a subsidiary of Fidelity Investments, says that bitcoin could be considered portfolio insurance. The firm notes that the cryptocurrency “may soon stand in stark contrast to the path that the rest of the world and fiat currencies may take — namely the path of increased supply, additional currency creation, and central bank balance sheet expansion.” Fidelity Says Bitcoin Could Be Portfolio Insurance Fidelity Digital Assets, a subsidiary of Fidelity Investments, recently published a research study titled “The Rising Dollar and Bitcoin.” The research outlines “how bitcoin could be considered portfolio insurance” as the rising dollar impacts global currency markets. “The strengthening U.S. dollar is wreaking havoc among other countries and may put pressure on the Federal Reserve to soon reverse its tightening monetary actions, something that has precedent based on 1985’s Plaza Accord,” Fidelity explained. In addition, “more monetary debasement may be needed to ...
Post a Comment
Read more

Economists Discuss Russia, China Potentially Developing Gold-Backed Currency That Could Undermine US Dollar

Economists have weighed in on reports that China and Russia may be developing a new gold-backed currency that could undermine the U.S. dollar’s status as the world’s primary reserve currency. Russia and China May Be Developing Gold-Backed Currency Several experts have shared their views on Russia and China potentially creating a new gold-baked currency, Fox Business reported Saturday, emphasizing that China has been buying up huge quantities of gold while Russia was forced off the U.S. dollar due to sanctions imposed on the country following its invasion of Ukraine. The news outlet noted that some experts have cautioned that these moves, along with the closer relationship that has developed between Moscow and Beijing, point to the likelihood of China attempting to launch a gold-backed currency. However, neither Russia nor China has officially confirmed plans for such a currency. Craig Singleton, senior fellow at the Foundation for Defense of Democracies and a former U.S. diplomat,...
Post a Comment
Read more