The US CPI increased by 4% in May, the lowest increase in more than two years, supporting the Fed to suspend interest rate hikes | Anue tycoon-US stocks

2023-06-13 12:35:25

The United States announced on Tuesday (13th) that the consumer price index (CPI) increased by 4% in May, the eleventh consecutive decline, writing the slowest growth rate since March 2013, slightly lower than market expectations of 4.1%. The core CPI excluding food and energy costs increased by 5.3% year-on-year, in line with market expectations, slightly lower than the previous value of 5.5%, the lowest since November 2021. U.S. inflation continues to slow, giving Federal Reserve officials reason to pause interest rate hikes this week.

U.S. inflation rose at the smallest pace in more than two years in May. (Picture: ZeroHedge)

On a monthly basis, CPI growth in May was 0.1%, lower than market expectations of 0.2%, and a significant drop from the previous value of 0.4%. Core CPI growth was 0.4%, in line with market expectations and the previous value of 0.4%.

After the release of the U.S. CPI data in May, the major U.S. stock index futures rose in the short-term, and the Nasdaq futures are now up 0.7%.S&P 500 IndexFutures are now up 0.3%,DowFutures are now up 0.15%,dollar indexShort-term fell more than 20 points.

Annual growth in the Fed’s favored “super core” — core services inflation that excludes housing — slowed to 4.6%, the slowest pace since March 2022.

Supercore inflation, favored by the Fed, hit its lowest level since March 2022. (Picture: ZeroHedge)

The day following the May CPI data is released, the Fed will decide whether to raise interest rates at the new Federal Open Market Committee (FOMC) meeting, or pause interest rate hikes and further assess the economic situation.

Several policymakers, including Fed Chairman Jerome Powell, have signaled their preference for no rate hike at their June 13-14 meeting, but remain open to tightening policy if necessary in the future.

While inflation fell to regarding half of last year’s peak in May, it remains well above the Fed’s 2 percent level. Economists generally believe that the Fed will keep interest rates unchanged at its meeting on Wednesday (14th) US time, but forecasters and policymakers are still divided on whether the economy justifies raising interest rates once more at the July meeting.

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