ChainCatcher report, according to Jinshi, U.S. May CPI data showed inflation rising to its highest level in three years, but the moderate increase in core prices eased Wall Street’s concerns about rate hikes. Today’s CPI data and tomorrow’s PPI index are expected to influence the Fed’s policy stance, which will be revealed at the Fed meeting one week from now, chaired for the first time by Walsh. According to CME FedWatch, the market currently estimates a 70% probability of a Fed rate hike by the end of 2026, but views a rate hike at next week’s meeting as highly unlikely, with only a 13% chance of an increase at the July meeting.
U.S. Core Inflation Slows in May, Easing Concerns Over Fed Rate Hikes
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Summary
Fed news emerged as May inflation data revealed a three-year high in U.S. CPI, though core price growth remained moderate, easing concerns about aggressive rate hikes. The CPI report and tomorrow’s PPI data will guide the Fed’s next moves, with a policy decision due next week under Chair Wash’s first term. Market odds for a rate hike at the July meeting stand at 13%, while CME FedWatch assigns a 70% probability for 2026.
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