Will Fed Push Back On Rate Cut Next Week?

Wednesday, 12 June 2024, 15:30 – US CPI (MoM) (May)

In April, U.S. consumer prices saw a smaller-than-expected increase, registering at 0.3% compared to the previous 0.4%. This suggests that inflation started to decrease once more at the beginning of the second quarter. As the economy appears to be slowing down and consumer spending is decelerating, upcoming data is expected to further indicate this ongoing cooling phase.

Wednesday, 12 June 2024, 21:00 – U.S Fed Interest Rate Decision

In May, the Federal Reserve decided unanimously to maintain policy rates for the sixth consecutive time, keeping the federal funds target rate at 5.50%, in line with expectations. The Fed described an uncertain outlook for rate cuts in 2024. Although several key U.S. data indicated a cooling economy, the Federal Open Market Committee (FOMC) is unlikely to adjust rates at its upcoming meeting, given its perception of the economy as broadly robust. Currently, the probability of an interest rate cut on June 12 is just 0.1% according to the CME’s FedWatch Tool, which assesses the probable trajectory for short-term rates based on fixed income markets.

Thursday, 13 June 2024, 15:30 – U.S PPI (MoM) (May)

In April, the U.S producer price index, which gauges what producers receive for their goods, rose by 0.5%, marking a 2.2% increase over the past 12 months, the largest rise in a year. However, with March’s figures revised from a 0.2% gain to a 0.1% decline, the situation might not be as dire as it appears, as the significant increase in producer price inflation in April was largely attributed to downward revisions in earlier months. The forthcoming data is anticipated to provide some relief.

Friday, 14 June 2024, 11:00 – Japan BoJ Interest Rate Decision (May)

In April, U.S. job growth slowed more than expected, with nonfarm payrolls increasing by just 175,000 jobs, compared to 315,000 in the previous month. This represents the slowest job growth in six months and falls short of expectations. With the labor market shows signs of cooling and the balance between the supply and demand for U.S. workers improves, it is likely that upcoming reports will continue to reflect slow growth.