The Breakdown After Inflation Improvement, a Quiet FOMC
Jun 14, 2024
Discussion on the FOMC meeting and how the Fed remains cautious despite other central banks cutting rates. Delve into US inflation data, rate forecasts, and Chairman Powell's stance on the economy.
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May Inflation Data
- May's inflation data showed a slight decline, with headline CPI at 3.3% and core CPI at 3.4%.
- Shelter costs remain high, hindering significant drops in CPI.
Disinflation in Discretionary Items
- Economist Anna Wong suggests disinflation is mainly in discretionary items, while essentials remain costly.
- Examples include price cuts in men's underwear but inflation in men's suits.
Impact on Fed Strategy
- The consensus is that the May inflation data won't significantly change the Fed's rate strategy.
- Joseph LaVorna suggests three more months of similar data are needed for a September rate cut.