FT News Briefing US inflation cools
Jul 13, 2023
US inflation has cooled to 3%, the lowest in over two years, leading to discussions about its sustainability and its impact on interest rates. The junk bond market has shrunk by nearly $200 billion since its peak in 2021, raising concerns for companies and investors. Tensions flared at a recent NATO summit as Ukraine's membership prospects were debated, alongside troop increases and shifting alliances. Amidst these geopolitical challenges, Disney navigates corporate changes with CEO Bob Iger's extended leadership.
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Cooling US Inflation
- US inflation cooled down to 3% in June, the lowest in over two years.
- This positive report led to a rise in the S&P 500 and a decrease in Treasury yields.
Core Inflation Concerns
- Core inflation, excluding volatile food and energy prices, remains relatively high.
- However, the monthly gain of 0.2% in June was the smallest increase in nearly two years.
Federal Reserve Response
- A July interest rate hike by the Federal Reserve is likely, given the inflation report.
- The future of the tightening cycle remains uncertain, with speculation that it could end soon.