Washington, D.C. – As investors grapple with the implications of the latest inflation data, Federal Reserve (Fed) policymakers are set to deliver key speeches on Friday. The remarks come on the heels of the April Consumer Price Index (CPI) report, which has fueled speculation about the central bank‘s future interest rate trajectory.
The CME FedWatch Tool currently indicates a 30% probability of the Fed maintaining its policy rate at the September meeting, suggesting a significant degree of uncertainty surrounding future monetary policy decisions.
Among the Fed officials scheduled to speak are Minneapolis Fed President Neel Kashkari, Fed Governor Christopher Waller, and San Francisco Fed President Mary Daly. Their remarks will be closely watched for any clues about the Fed’s thinking on inflation and the potential for further rate hikes.
The Fed has adopted a cautious stance regarding the timing of a policy pivot, citing the persistent inflationary pressures observed in the first quarter. Wednesday’s CPI report confirmed this trend, with the core CPI rising 3.6% year-over-year in April, mirroring market expectations and following a 3.8% increase in March. On a monthly basis, both the CPI and core CPI rose 0.3%, after a 0.4% increase in March.
The release of the CPI data sparked a sell-off in the US Dollar (USD), with the USD Index dropping to its lowest level in over a month, losing 0.7% on the day. Market participants are now weighing the implications of the inflation data for future interest rate decisions.
Friday’s speeches from key Fed officials will be closely scrutinized as investors seek to decipher the central bank’s strategy for addressing inflation and guiding the economy towards its goals.
