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Fed Meeting And Inflation Reading: What To Know This Week

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Inflation
A teller counts US dollar bills at an exchange office in Ankara, Turkey, July 20, 2023. - ADEM ALTAN/AFP via Getty Images

(CTN News) – Stock Inflation prices closed another week close to record highs, even though the most recent employment numbers indicated that the US job market is cooling, though not at a rate that analysts consider worrying.

This was a reaction to data showing that the labor market is contracting.

Over the course of the review period, there was an increase of around 1.3% for the S&P 500 (\GSPC) and 2.3% for the Nasdaq Composite (\IXIC). This increase resulted in a roughly 0.3% boost for the Dow Jones Industrial Average (\DJI).

It is important for you to know that the Federal Reserve will hold a meeting in June and that a noteworthy inflation number will be released on Wednesday. The importance of this factor cannot be overstated. In addition, Friday or the following day, a preliminary consumer sentiment survey for June will be released.

Monday is set to mark the start of the week for the corporate sector. It will also mark the day of Apple’s (AAPL) Worldwide Developer’s Conference and Nvidia’s (NVDA) 10-for-1 stock split.

These two events are slated to happen on the same day. Elon Musk, the CEO of Tesla (TSLA), will have to vote on his 55 billion dollar compensation plan this coming Thursday.

Investor attention has been focused on the erratic movements of GameStop’s stock (GME) during this period. The fact that Keith Gill, a well-known pioneer of the 2021 meme stock frenzy, has reentered the market is the reason for the renewed interest in the company.

The Federal Reserve, inflation, and interest rates in the future

One common story among Federal Reserve Inflation officials is that the labor market is still robust enough to keep interest rates at their current, limited levels. This is a widely accepted story. The employment data that was announced on Friday for the month of May added fire to this narrative.

According to the report, job growth exceeded expectations. Experts claim that the latest data only serves to emphasize the need for the Federal Reserve Inflation to wait for more evidence of declining inflation before lowering interest rates. Given that the Federal Reserve is compelled to observe, this is the situation.

Senior economist Sarah House of Wells Fargo noted in a research note released on Friday that “policymakers will need to see a few slower inflation reports over the summer in order to start cutting rates by the fall.” “To begin reducing rates by autumn,” she clarified.

On Wednesday morning, the Consumer Price Index (CPI) for the month of May is expected to be made public. It is anticipated that this indicator will provide the most recent information on inflation. Wall Street predicts that the headline Consumer Price Index (CPI), which accounts for the price of food and energy, will rise by 3.4% annually as of the month of April.

Month over month, Inflation prices are expected to climb by 0.1%,

A decrease from the 0.3% increase that happened in April. Compared to the rise of the previous month, this is a decline. The rate of inflation is expected to have increased by 3.5% from the previous year when it is computed using a “core” basis, which ignores the fluctuations in the cost of energy and food.

This corresponds to a decline from the 3.6% growth observed in April. It is anticipated that the monthly increases in core prices will be 0.3%, the same as the previous month’s increase. This is the inference that can be made from the prediction.

The Federal Reserve is expected to announce that interest rates will remain where they are, and this statement is scheduled to occur just a few hours before to the Fed’s most recent policy decision. This causes the most current Summary of Economic Projections (SEP) released by the Federal Reserve to take center stage.

The Federal Reserve’s “dot plot,” a graphic depiction of policymakers’ projections for the possible future path of interest rates, is included in this strategic exchange program. The “dot plot” also features remarks from Jerome Powell, the Federal Reserve chair.

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Salman Ahmad is a seasoned writer for CTN News, bringing a wealth of experience and expertise to the platform. With a knack for concise yet impactful storytelling, he crafts articles that captivate readers and provide valuable insights. Ahmad's writing style strikes a balance between casual and professional, making complex topics accessible without compromising depth.

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