The recent reports suggest that the US Federal Reserve is nearing the end of its tightening cycle, and this has been reaffirmed by the softer-than-expected US Consumer Price Index (CPI) data released on Wednesday. The data shows that the annual CPI inflation fell to 3% in June, which is the lowest number since March 2021, compared to 4% in May and 3.1% prediction. The annual US core inflation also eased to 4.8% in June, and the monthly core CPI rose 0.2%, which is lower than the expected rise of 0.3%.
This cooling of price pressures in the largest economy of the world has alleviated the pressure off the Fed to tighten further, reducing the possibility of rate hikes after the expected 25 basis points (bps) Fed rate hike in July. Moreover, this week, several Federal Reserve policymakers have provided dovish signals on the Fed's interest rates outlook during their appearances, which further confirms the end of the tightening cycle.
This cooling of price pressures in the largest economy of the world has alleviated the pressure off the Fed to tighten further, reducing the possibility of rate hikes after the expected 25 basis points (bps) Fed rate hike in July. Moreover, this week, several Federal Reserve policymakers have provided dovish signals on the Fed's interest rates outlook during their appearances, which further confirms the end of the tightening cycle.
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