What economic analysts looked like yesterday morning

Wall Street experienced a rare Barbenheimer-like double feature of economic news yesterday, with the Labor Department reporting key inflation data and the Federal Reserve announcing its latest interest rate decision.

Here’s what they revealed:

• Inflation eased slightly last month. The Consumer Price Index, America’s most widely used measure of inflation, was essentially flat in May compared to the month before, and up 3.3% from one year ago (versus a 3.4% annual increase in April). Core inflation, which excludes often-volatile food and energy products, rose 0.2% in May and was up 3.4% from a year ago – both of which represent the mildest increases since 2021.
• The Fed is in no hurry to lower rates. The central bank has opted to hold baseline US interest rates steady at a 23-year high of 5.25%-5.5% since last July – and yesterday was no different. Additionally, while a majority of economists were predicting at least two rate cuts in 2024 prior to yesterday, new forecasts show Fed policymakers now expect only a single rate cut this year.

📈📉 The markets react: US markets closed mixed – with the morning’s inflation data coinciding with a notable increase and the afternoon’s Fed decision coming alongside a slight market-wide dip. The S&P 500 and Nasdaq both ended trading at new record highs (again).