On 12th April, the long-waited CPI data release in the U.S. for May was announced with some unexpected surprises, dropping from a previous reading of 6.0% to 5.0%.
Following the release, the U.S. Dollar dropped by 0.40% while the gold rose by 0.75% with a closing price of $2022.17 per ounce as investors priced in the possibility for the end cycle of the Fed’s rate-hikes.
As for the FOMC meeting minutes, the report stated that recent indications point to modest growth in spending and production, whereby job gains have rebounded in recent months and are at a strong pace. On the other hand, the unemployment rate remains low and inflation remains high.
The minutes of the last meeting of the Federal Open Market Committee show that members of the Fed expect a slight recession later this year. Several participants indicated that they had considered whether it was appropriate to leave interest rates unchanged.
Many respondents indicated that wage growth remains well above the inflation target of 2%. Participants assessed that demand for labor significantly outpaces supply.
All Fed members were unanimous in raising interest rates by 25 basis points. Little evidence indicates lower inflation in basic services except for housing.
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