Federal Reserve Meeting: Investors are anticipating May’s Federal Reserve meeting and the Consumer Price Index (CPI) inflation data.
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The Federal Reserve is expected to keep interest rates steady this week,
focusing on officials’ expectations regarding the timing of potential cuts and the economic trajectory.
The CPI report will show whether inflation continues to slow down after rising earlier this year.
While the Bank of Canada and the European Central Bank cut interest rates last week,
the Federal Reserve is not expected to follow suit when it meets this week.
On Wednesday, the central bank will announce its interest rate decision,
and it is expected to keep rates at the current level of 5.25% – 5.5%.
However, market watchers are expected to gain much information
this week about when the Fed might proceed with its rate cuts independently.
Monetary Policy Committee
The Federal Reserve’s Monetary Policy Committee will also issue a summary of economic projections.
These projections include the closely watched “dot plot,”
which shows the Federal Open Market Committee (FOMC) members’ expectations for the path of interest rates.
Wednesday will be a busy day for economic data. The May CPI will be released in the morning before the Fed’s interest rate announcement.
Market watchers will study the latest version of the CPI inflation report after April data showed inflation falling to 3.4%.
This report gave investors and consumers hope that prices might have started to retreat after rising earlier this year.
Fed officials have said they need to see more data showing price declines before moving to cut rates.
On Thursday, the Producer Price Index (PPI) will show the inflation path for wholesalers,
which is sometimes seen as a precursor to consumer price pressures.
Investors will also receive data on consumer sentiment on Friday, which will provide further information on spending trends and inflation expectations.
Federal Reserve Meeting