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Inflation Data And The Fed Meeting Dominate Economic News This Week

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(CTN News) – The Federal Reserve will be closely monitoring inflation data this week since its June meeting falls on the same day as the release of two inflation figures. This is due to the June date of the gathering.

It is not expected that the Federal Reserve will change the interest rates it has set when its meeting ends on Wednesday. However, it will update the estimates that its members have provided regarding the rates of inflation and interest that will prevail in 2024 and the ensuing years.

The markets continue to predict that there will be two interest rate reductions this year even though the precise date of these decreases is yet unknown.

The most recent data on the consumer price index will also be released on Wednesday. It is expected to reveal that, while inflation in May is expected to be significantly lower than it was in April, the percentage for the year-over-year comparison will stay same at 3.4%. On Wednesday, this material is anticipated to be made public.

In the near future, it is anticipated that the core index will decrease from 3.6% to 3.5% due to the inclusion of food and energy expenses.

The producer price index for the month of May will be made available to the public on Thursday. It is anticipated that the yearly rate would decrease to 3.5% from 3.6% in April, as well as the monthly rate.

Inflation is expected to decline monthly.

The Federal Reserve’s policymakers have made it clear that they intend to bring inflation back to the 2% objective that the central bank has set for itself, so it is unlikely that either report would alter their opinions.

This week’s economic news will primarily discuss the Federal Reserve and inflation, but the University of Michigan’s preliminary June consumer confidence index is predicted to indicate improvement above its April level. This is true even though the main topics of debate will be inflation and the Federal Reserve.

In a statement published on Monday morning, economists from Comerica Bank stated, “With inflation holding above the Fed’s target, it is expected that the central bank will hold monetary policy unchanged at the June decision.” The statement was posted on Comerica Bank’s website.

The majority of policymakers probably think that two quarter-point interest rate cuts will be appropriate before the end of 2024, based on the Federal Reserve’s dot plot, which will be updated quarterly and released in June. This is based on the information that will be shown in the dot plot.

The most recent report will contain forecasts for inflation, unemployment, and real GDP in addition to officials’ thoughts on the optimal course of action for monetary policy.

Even if there are still signs that inflation is slowing,

The 272,000 job additions for May reported last Friday were a pleasantly unexpected development. It is estimated that the economy will grow by 3.1% according to the GDPNow model developed by the Federal Reserve Bank of Atlanta.

The data here is current. Considering the first quarter, when the GDP dropped from 1.6% to 1.3%, this would be a notable gain over that period.

In the current economy, higher-income households in the US can handle growing expenses, whereas lower-income households find it difficult to manage with high interest rates.

Many economists believe that the current economy is “bifurcated” because of this. The compound annual growth in prices over the last three years has made it more difficult for consumers to want to make purchases, even while earnings have been growing at a rate somewhat faster than inflation.

Elections in the United States this fall seem to be impacting consumers, and recent international political developments—like the announcement of a snap national election in France this weekend and an election in the United Kingdom on July 4 in which the incumbent Conservative Party is a clear underdog—also raise more concerns. Consumers are predicted to be impacted by both of these occurrences.

SEE ALSO:

France’s Macron Calls Snap Election After Huge Losses in EU Elections

Fed Meeting And Inflation Reading: What To Know This Week

Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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