{"id":191905,"date":"2023-06-13T10:30:00","date_gmt":"2023-06-13T14:30:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=191905"},"modified":"2023-06-13T10:22:43","modified_gmt":"2023-06-13T14:22:43","slug":"us-annual-cpi-at-4-in-may-whats-next-for-the-fed","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/us-annual-cpi-at-4-in-may-whats-next-for-the-fed\/","title":{"rendered":"US Annual CPI at 4% in May: What\u2019s Next for the Fed?"},"content":{"rendered":"\n<p><strong>The Fed is set to meet on June 14 and decide its next policy move.<\/strong><\/p>\n\n\n\n<p>Year-on-year inflation stood at 4% in May, down from&nbsp;<a href=\"https:\/\/tokenist.com\/us-cpi-shows-annual-inflation-rate-at-4-9-in-april\/\">4.9% in April<\/a>, according to the consumer price index (CPI) report by the US Bureau of Labor Statistics (BLS). The data comes before the meeting of Federal Reserve policymakers, who can either skip or announce another interest rate hike on June 14.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-core-inflation-was-5-3-in-may-2023\">Core Inflation Was 5.3% in May 2023&nbsp;<\/h2>\n\n\n\n<p>New CPI data released on Tuesday showed that the annual inflation rate in the US fell to 4.0% in May 2023, compared to economists\u2019 expectations of 4.1%. The report represents a notable drop from the 4.9% rate in April.<\/p>\n\n\n\n<p>Month-on-month, inflation rose by 0.1%. This compares to a monthly increase of 0.4% between March and April.&nbsp;<\/p>\n\n\n\n<p>Annual Core CPI, a vital measure of inflation that excludes volatile food and energy prices, stood at 5.3%, to the expected increase of 5.3%. Monthly, core CPI climbed by 0.4%, while economists estimated a 0.4% surge. Earlier CPI reports showed that core inflation rose by 5.5% and 0.4% annually and month-over-month, respectively.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Take a Break or One Final Interest Rate Hike in July?&nbsp;<\/h2>\n\n\n\n<p>The latest inflation data comes ahead of the Federal Open Market Committee (FOMC). US central bank officials are set to decide on their next move regarding&nbsp;<a href=\"https:\/\/tokenist.com\/fed-continues-relentless-rate-hikes-with-25-bps-despite-bank-trouble\/\">interest rates<\/a>&nbsp;and determine the long-term monetary policy trajectory.&nbsp;<\/p>\n\n\n\n<p>Investors and market watchers hope today\u2019s data will convince the Federal Reserve policymakers to skip a rate hike this month \u2013 a move could reignite optimism in the US stock market after a tumultuous 2022. While the annual inflation rate declined significantly from its peak of 9.1% in June last year, the core CPI has been much more difficult to tame.&nbsp;<\/p>\n\n\n\n<p>Since May 2022, the Fed has consistently raised interest rates to bring down 4-decade-high inflation, bringing the federal funds rate to a&nbsp;<a href=\"https:\/\/www.stephens.com\/perspectives\/fed-raises-federal-funds-rate-to-range-of-5-00-5-25\" target=\"_blank\" rel=\"noreferrer noopener\">5.00% \u2013 5.25% range<\/a>&nbsp;\u2013 the highest level since September 2007. But even though markets are mainly expecting the Fed to slam on the brakes, another likely possibility is a final rate hike in July before an extended pause estimated to last until early 2024, according to CME Group\u2019s gauge of trading in the Fed funds futures market.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted June 13, 2023 &#8211; <a href=\"https:\/\/tokenist.com\/us-annual-cpi-at-4-in-may-whats-next-for-the-fed\/\">US Annual CPI at 4% in May: What\u2019s Next for the Fed?<\/a><\/p>\n\n\n\n<p><strong>Disclosure:<\/strong>&nbsp;Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our&nbsp;website policy&nbsp;for more information.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Fed is set to meet on June 14 and decide its next policy move.<\/p>\n","protected":false},"author":501,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18,6,8,9,26,3],"tags":[217,9362,77],"contributors-categories":[13710],"class_list":{"0":"post-191905","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-cpi","13":"tag-economic-outlook","14":"tag-fed","15":"contributors-categories-the-tokenist"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>US Annual CPI at 4% in May: What\u2019s Next for the Fed?<\/title>\n<meta name=\"description\" content=\"The Fed is set to meet on June 14 and decide its next policy move.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/191905\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"US Annual CPI at 4% in May: What\u2019s Next for the Fed? 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