, Columnist
Reading the Entrails for a Fed Pause Versus Cuts
The war against inflation has reached only the point of stalemate, but markets are already primed for a victory parade on rates.
Latest inflation numbers show little reason for Powell and the Fed to cut rates any time soon.
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And exhale. Price rises failed to surprise for a change. US consumer prices rose at only 4.9% in the 12 months to April, down from 5.0% a month before, while the “core” index, excluding volatile food and energy, dipped from 5.6% to 5.5%. In consequence, the odds of a “pause” in interest rate hikes next month have now risen to virtual certainty in futures and swaps markets, having been seen as an 84% chance before the numbers came out.