U.S. inflation data for May released on Tuesday showed that U.S. CPI growth fell to 4% year-on-year in May, the lowest since March 2021. Economists on Wall Street said that the CPI data in May means that the Fed may pause interest rate hikes, and the pause in June may mean the end of the current cycle of interest rate hikes.
What’s more, inflation in core services excluding housing, the Fed’s top priority, slowed to its slowest pace in 15 months.
For the Fed, officials could breathe a sigh of relief at the start of this week’s two-day policy meeting, with Tuesday’s inflation data in line with expectations. Some market analysts believe that although the Fed admits that the inflation rate is still much higher than its 2% target, the Fed is still expected to not raise interest rates on Wednesday after raising interest rates 10 times in a row. The rest of the cycle.
