The Federal Reserve on Wednesday kept its key interest rate unchanged and signaled that just one cut is expected before the end of the year. … New forecasts released after this week’s two-day meeting indicated slight optimism that inflation remains on track to head back to the Fed’s 2% goal, allowing for some policy loosening later this year. … For the period through 2025, the committee now sees five total cuts equaling 1.25 percentage points, down from six in March. If the projections hold, it would leave the federal funds rate benchmark at 4.1% by the end of next year.
Source: CNBC – Bonds

The consumer price index showed no increase in May as inflation slightly loosened its stubborn grip on the U.S. economy, the Labor Department reported Wednesday. The CPI, a broad inflation gauge that measures a basket of goods and services costs across the U.S. economy, held flat on the month though it increased 3.3% from a year ago, according to the department’s Bureau of Labor Statistics. Economists surveyed by Dow Jones had been looking for a 0.1% monthly gain and a 3.4% annual rate. The monthly rate rose 0.3% in April while the annual rate was 3.3%. Excluding volatile food and energy prices, core CPI increased 0.2% on the month and 3.4% from a year ago, compared with respective estimates of 0.3% and 3.5%. Following the report, stock market futures pushed higher while Treasury yields slid. The Dow Jones Industrial Average rose about 250 points in morning trade while the 10-year Treasury yield fell to 4.27%, down nearly 0.14 percentage point. Though the top-line inflation numbers were lower for both the all-items and core measures, shelter inflation increased 0.4% on the month and was up 5.4% from a year ago. Housing-related numbers have been a sticking point in the Federal Reserve’s inflation battle and make up a heavy share of the CPI weighting.
Source: CNBC – Bonds