Washington June 12 2024: US inflation fell to 3.3 per cent in May, in a boost to Joe Biden as Federal Reserve officials prepare to outline their plans for interest rate cuts this year.
The Bureau of Labor Statistics’ figure for the annual rise in consumer prices was marginally lower than economists’ expectations that inflation would remain flat at 3.4 per cent.
Core CPI, which strips out changes for food and energy prices, hit 3.4 per cent, below expectations of a slight fall to 3.5 per cent.
Treasury yields fell and stock futures rose following the release, as investors bet on more interest rate cuts this year.
After Wednesday’s figures, traders in the futures market gave an 84 per cent likelihood to a cut at the Fed’s September meeting before November’s presidential election.
That compares with a 60 per cent chance beforehand.
Traders have now fully priced in two cuts this year, according to LSEG data. Previously it had been between one and two.
